California Free Press

Off the Top of My Head

Republicans Are Restricting Voting Laws

by John Lawrence, February27, 2021

Republicans know that, if all eligible voters actually vote, they will lose. So they are busy at work at the state level to enact more restrictive voting laws making it as difficult as possible for people to vote. This will primarily affect Democratic voters, and they know that. They have been using voter suppression techniques ever since black people won the right to vote. They know that making voting easier will encourage more Democratic voters because many of them can't take a day off to go to the polls. So mail-in voting which was facilitated in many states because of the pandemic worked to their disadvantage. They are hurrying to correct that. Since Republicans control many state legislatures which set the voting rules, they are having a field day changing the laws so that they don't suffer any more humiliating defeats.

So Joe Biden needs to make the best of the two years he has during which Democrats control both Houses of Congress. Assuming that a Republican will be elected President in 2024, the nation will swerve to the right and disassemble all the Executive orders Biden has put in place. As a result of this division America will be seen, if it's not seen that way already, as unstable and inconsistent. World leaders will increasingly turn towards China for leadership because what China values most in consistency and stability. The US can't decide whether it wants to be a democracy or a republic. Democrats want a democracy in which it would seem appropriate that every citizen over the age of 18 should cast a vote. This should be made as easy and accessible as possible. Republicans, on the other hand, want a republic in which the levers of power are controlled by white Americans of European descant like they always have been and which the time honored methods of voter suppression of minorities and poor people remain fully in effect.

Paul Weyrich was an American conservative political activist and commentator, most notable for co-founding the Heritage Foundation and the Free Congress Foundation, both conservative think tanks.He famously said: "So many of our Christians have what I call the goo-goo syndrome: good government. They want everybody to vote. I don't want everybody to vote. Elections are not won by a majority of people, they never have been from the beginning of our country and they are not now. As a matter of fact, our leverage in the elections quite candidly goes up as the voting populace goes down." Quite a revealing quote. He identifies with "Christians" but chastens them that they shouldn't want everyone to vote. The question I ask is 'what would Jesus say?' Would Jesus want everyone to vote or not? Probably Jesus would be in favor of democracy as compared with a conservative minority that wants everything kept the way it has always been "from the beginning of our country." It makes me doubt the validity of the Christian religion as practiced by the "moral majority" of right wing Christians in this country. Jesus was for the poor and disenfranchised. They're not.

America can not remain a great country on the world stage if it swerves back and forth every two years between Democrats who genuinely want to make America and the world a better place and "America First" Republicans who don't give a hoot about the rest of the world except to dominate it with an outsized military establishment. The US is veering on the edge of autocracy if 74 million voters want Trump as their President in 2024 and Republicans are successful in suppressing 7 million voters because that was the margin between Biden and Trump. Trump did considerable damage not only to the US reputation vis a vis the rest of the world, but also within the US itself. It is a question of whether the US is a fact based country run by intelligent people or a no nothing country based on lies and conspiracy theories while the rich steal everything in sight and Republicans give their hoi polloi supporters political entertainment to keep their anger stoked. The rest of the world has looked to America as the Rock of Gibralter in the past because of its consistency and stability and its promotion of human rights (except the human rights having to do with economic rights). They may be looking now towards China for stability and consistency and be more concerned about intelligent leadership and economic human rights, especially if they observe that America's touting of human rights eliminates those of black people.

Off the Top of My Head

Let's Talk About the Communist Bogieman

by John Lawrence, October 8, 2020

After the vice Presidential debate last night Trump called Kamala Harris a communist. Let's be clear: communism is a system in which the government owns all property and makes all economic decisions. Let's also be clear about this: nowhere in the world today does communism exist. Not in Russia. Not in China. Not in Cuba. In Russia private ownership of enterprises and property had essentially remained illegal throughout the Soviet era, with Soviet communism emphasizing national control over all means of production. In the 1990s, during the Presidency of Boris Yeltsin, there was  large-scale privatization of Russia's state-owned assets, particularly in the industrial, energy, and financial sectors. Privatization shifted Russia from the Soviet planned economy towards a market economy, and resulted in a dramatic rise in the level of economic inequality. It facilitated the transfer of significant wealth to a relatively small group of oligarchs.

In China private property and state owned enterprises co-exist. According to the NY Times: "Today, the private sector contributes nearly two-thirds of the country’s growth and nine-tenths of new jobs, according to the All-China Federation of Industry and Commerce, an official business group." In fact the reason why China has pulled 800,000 people out of poverty in the last 40 years is that the economy has been partially privatized. There are more billionaires in China than in the US. Many people in China went from being poor to middle class due to the privatization of the housing market. So although China is still ruled by the Chinese Communist Party, its government is communist in name only. They should probably eliminate the word "Communist" from the party's name.

Now consider Cuba. In 2010, Cuban leaders Fidel and Raul Castro made the decision to abandon the old Soviet model of centralized planning. In 2011, new laws were enacted to expand the right to private property. In 2019, a new Constitution was approved which officially recognizes the right to private property, while also reconfirming the central government's authority over the regulation of production and land.

So if the accusation that Kamala is a communist is ridiculous, what about socialism? There is not one definition of socialism. Many of the western democracies like France, Germany, the UK and Sweden, which are US allies, have been governed by democratic socialist parties. These societies have market economies including the encouragement of entrepreneurialism, but also have a government provided social safety net including universal health care, free or inexpensive education from pre-K through college, allowances for child care, elder care etc. Sweden's government even owned a hamburger chain until recently and owns Sweden's state-run alcohol monopoly Systembolaget. The democratic socialism advocated by Bernie Sanders and others is nothing more than a model based on Sweden where there are high taxes on the wealthy which provide a government sponsored safety net for the middle class and the poor. Today there is one more reason why there should be a strong social safety net: global warming. It is clear that private enterprise is not up to the job of reducing greenhouse gas emissions to zero within a reasonable amount of time, reasonable meaning before the earth becomes uninhabitable.

Today in the US we  have a nominal capitalist or free market economy, but even in this economy the government institutes the rules within which the economy operates. The rules are set up and tweaked by those in power, those who have the money to hire lobbyists to convince legislators to write the rules in their favor, namely large corporations and the very wealthy. Don't be fooled by the meme that the powerful don't want government regulations. They do want regulations, but regulations that favor their interests and not the interests, necessarily, of the average person who doesn't have the resources to influence legislation by hiring lobbyists.

Today Kamala Harris and other Democratic progressives are really taking the realistic middle ground when they advocate for government policies which will mitigate and reduce climate change and provide a social safety net for the American people. This goes against the interests of the oil and gas industry to be sure. To advocate for universal health care is to advocate for the health care system that Canada and all our allies already have in pace. To advocate for policies that reduce the out of bounds economic inequality by taxing the rich and spending the money on raising the economic level of the poor and lower middle class only makes sense. None of these policies make Kamala Harris a communist since communism doesn't even exist in the world today. Formerly communist countries have given way to hybrid economies in which private enterprise and state owned enterprises coexist with, in the case of China, private enterprise having been the significant factor in improving the lives of the Chinese middle class.

Today, the US has gone way overboard towards an economy controlled by the rich and powerful in their own interests. Economic inequality has gotten way out of hand. The balance needs to be redressed and only a government which uses its authority to diminish the economic power of the wealthy and augment the power of the poor and middle class can provide the necessary change. Good paying jobs can be created which address infrastructure and climate change needs. So more or less a Green New Deal or whatever else you want to call it is necessary. Too bad that Republicans have gone out of their way to demonize that name as they've gone out of their way to demonize Obamacare or any other initiative progressive Democrats put forth. That is their stock and trade - not discussing the merits but demonizing the name.

Off the Top of My Head

A Jobs Program for Inessential Workers
by John Lawrence, April 30, 2020

Turn inessential workers into essential workers by putting them to work building green infrastructure. This is essential work that is not getting done. Much of the previous inessential work they did is better left undone even in a recovery. It is still inessential. It'll always be inessential compared to what needs to be done in creating and building green infrastructure. Building out solar and wind renewable energy could employ thousands if not millions of people. Repairing roads, bridges, waterways, clean water systems, airports, railroads and all other infrastructure could employ millions. This is essential work that has remained undone despite the fact that the American Society of Civil Engineers has given the US a D rating for infrastructure. High speed rail needs to be built. The widespread adoption of electric cars has to be mandated, and construction of a national electric vehicle charging network to power them has to be built.

Unemployed people still need jobs. Mark Cuban said on CNN this morning that there should be a jobs program similar to that of the New Deal. He is exactly right although he didn't make the necessary connection about the essential work that's still being left undone and the inessential work that doesn't need to be done even in a recovery. Forget Cuban's sports and entertainment enterprises. I hate to tell you that they are basically inessential. What is essential is greatly expanding the public health undertakings of the Federal  government which has been totally behind the curve in this pandemic.

We must ask ourselves what is essential and not go back to a new normal in which all the inessential businesses of the past are brought back just in order to provide employment to the millions who have lost their jobs. The pre-pandemic economy was 70% consumerism. The economy post epidemic should be much less a consumerist economy and much more an investment economy. The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. Of these government spending must be ramped up to provide the essential jobs in infrastructure building as well as in the areas that the pandemic has made clear are indeed essential: health care, education, transportation, agriculture.

Government spending must go up; personal consumption must go down. It's as simple as that. As for business investment, it's a lost cause as business will only do what's profitable for itself as has been made abundantly clear. Investment in fossil fuels and plastics which the big oil companies are making is only destructive to a green economy, not constructive. As far as exports are concerned, the dollar has already been weakened as much as it could possibly be by zero interest rates, so increased exports, although desirable, are not likely to happen any time soon.

Private enterprise knows only one thing in terms of the economy "reopening": get back to consumer spending. It ain't going to happen. People are still afraid of the virus. The pandemic is not over. They will use their money to pay off debts instead of going in debt to the hilt like they are used to. People will save their money instead of entertaining themselves to death. Why? Maybe they have learned their lesson that a high employment economy predicated on the fact that people will always have a job and always have a prepensity to consume is just a chimera. Rather than living paycheck to paycheck, I hope people will understand that there may come a rainy day, and they need to save for that. That lesson has really been brought home by the coronavirus pandemic.

The true heroes are essential workers not the military. The military itself was brought to its knees by COBID-19. There is a lesson there. It's more important to spend our collective money on preparing for the coming pandemic of global warming than on a bloated military. It is more important to house the homeless and guarantee the economic rights of shelter and health care to all Americans as in the 1948 UN Declaration of Human Rights. It is more important to help people all over the world escape from extreme poverty because poverty breeds health crises which then can spread all over the world. It's more important to make peace with our rivals rather than try to control them with military threats and sanctions.

May the next President (and I hope to heaven that it's not Donald Trump) see the light of a more rational, compassionate and humane world, one more concerned about the health and welfare of all the world's peoples. I hope Governor Cuomo's values of being tough, smart, disciplined and most importantly loving spread to every corner of US and world society, and we get on with essential business instead of the inessential business of amusing, entertaining and consuming ourselves to death.

Off the Top of My Head

It's Not About Radical VS Moderate. It's About Neoliberalism VS Social Democracy.

by John Lawrence

Joe Biden is not a moderate. He's about the continuation of neoliberal policies that got us to where we are today: the biggest economic inequality of all time. Neoliberalism is laissez-faire capitalism. The wealthiest 3 American families now own as much wealth as the bottom 50% of all Americans. Bernie Sanders is right about that. Social democracy is about evening out the distribution of wealth in this country. Joe Biden will continue the same policies that we have now: unending wars, nibbling around the edges of the income and wealth distribution, acceding to Mitch McConnell who will say "no" to every progressive policy. Going along with tax breaks for the rich and letting corporate lobbyists determine US environmental policies.

Since the 1980s the US has charged ahead with neoliberal policies which give tax breaks to the rich and subsidize profitable corporations because their lobbyists demand it. With Biden as President students will still be smothered with student loan debt. In 2005 Republicans led the way to taking away bankruptcy protection from student loan debtors. 18 Democratic senators broke ranks and cast their votes in favor of the bill. Of those 18, one politician stood out as an especially enthusiastic champion of the credit companies who, as it happens, had given him hundreds of thousands of dollars in campaign contributions – Joe Biden.

Joe Biden never met a credit card company he didn't like. He was known as the Senator from MBNA. All the credit card companies are headquartered in Delaware, Biden's home state. They will be enthusiastically cheering for him to win the Democratic nomination. In the 2003-2008 senatorial election cycle, Biden received more than $500,000 in help from credit card companies, financial services and banks. So this is the guy who is going to rein in Wall Street? Wall Street will get everything it wants under him including the continuation of student loan debtors without bankruptcy protection or relief.

It will be business as usual under a Joe Biden Presidency. Moderation means business as usual with neoliberal self serving policies enthusiastically supported. People that want radical change in this country including a Green New Deal, Medicare for All, student loan debt forgiveness and free child care paid for by taxes on the wealthy should get behind Bernie Sanders and/or Elizabeth Warren. Warren said, “At a time when the biggest financial institutions in this country were trying to put the squeeze on millions of hard-working families, Joe Biden was on the side of the credit card companies.”

Social democracy does nothing to inhibit entrepreneurialism. The socially democratic Scandinavian countries have created their share of entrepreneurs and businesses. The Washington Post reported:

Finnish Prime Minister Sanna Marin is a big believer in the “American Dream,” and she thinks it’s a lot easier to achieve now in her country than in the United States.

“I feel that the American Dream can be achieved best in the Nordic countries, where every child, no matter their background or the background of their families, can become anything,” Marin told The Washington Post in an interview on the sidelines of the World Economic Forum in Switzerland last month.

“We feel that the Nordic model is a success story,” said Marin, who became prime minister in December at age 34, making her briefly the youngest world leader (she lost that title in January when 33-year-old Sebastian Kurz returned to power as Austrian chancellor).

Bernie Sanders is a fan of the ‘Nordic model.’ Finland’s leader says it’s the American Dream.

Marin is hardly the first to claim that it’s easier to live the “American Dream” in Nordic countries. British politician and former Labour Party leader Edward Miliband said it in 2012. A New York Times opinion piece last year dubbed Finland a “capitalist paradise.” And presidential candidate Sen. Bernie Sanders (I-Vt.), a self-declared “democratic socialist,” has often said that the United States should be more like Scandinavia.

Not only are Scandinavian social democratic economic systems more conducive to business creation but also their political systems bear looking at. Proportional representation in a monocameral Parliament may be far more democratic than the dysfunctional US system where the Republican Senate routinely vetoes anything the Democratic House passes. The winner take all US system discourages third party representation and boils down to all out war between two bitterly divided rivals. Is this any way to run a country?

The single-member district voting system has been on the wane worldwide because it has a number of serious drawbacks. It routinely denies representation to large numbers of voters, produces legislatures that fail to accurately reflect the views of the public, discriminates against third parties, and discourages voter turnout. All of these problems can be traced to a fundamental flaw in our system: only those who vote for the winning candidate get any representation. Everyone else -- who may make up 49% of the electorate in a district -- gets no representation. This new reform is also beginning to get some attention: replacing our present single-member district, winner-take-all election system with proportional representation elections. Political commentators writing in The Washington Post, The New Republic, The New Yorker, The Christian Science Monitor and USA Today have endorsed it. Grassroots groups in several states are now organizing to bring proportional representation to local elections.

With the US Congress at loggerheads with itself, a new political system as well as economic reform needs to be undertaken. The Scandinavian social democrats may be way ahead of the US both in economic, political and certainly in social terms.

Off the Top of My Head

Democratic Socialism in America

by John Lawrence, December 2, 2019

The Democratic Socialist period in America took place between the two gilded ages. The first gilded age was in the 1890s when you had incredible fortunes being made by Andrew Carnegie, Jay Gould, John Rockefeller and others. The second one is today when you have incredible fortunes being made by Jeff Bezos, Mark Zuckerberg and others. In between was the Democratic Socialist era presided over by the Democratic administration of Franklin Delano Roosevelt. But progress breeds poverty, and the first gilded age led to the Great Depression. His administration oversaw the tools that brought America out of the Great Depression. Tools like the Works Progress Administration which built schools and civic buildings all over America including San Diego's County Administration Building and the Wantage school where I attended as a child and where my Dad was fortunate enough to have gotten the principal's and later the superintendent's job.

But progress breeds poverty, and the first gilded age led to the Great Depression. FDR's vice President was Henry Wallace, a committed Democratic Socialist in the Bernie Sanders mold or rather Bernie Sanders is in his mold. He used the term "economic democracy." While vice President in 1942 he gave a speech at Madison Square Garden in New York City in which he said "The new democracy, the democracy of the common man, includes not only the Bill of Rights but also economic democracy, ethnic democracy, education democracy and democracy in the treatment of the sexes." In 1942 President Roosevelt delivered the Four Freedoms speech in which he declared that there should be not only freedom of speech and freedom of worship but freedom from want and freedom from fear. After WW II, these ideas which amounted to economic guarantees by government in addition to the guarantees provided by the Bill of Rights were embedded in the United Nations Declarations of Human Rights.

Article 22 and 23 say;

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
(2) Everyone, without any discrimination, has the right to equal pay for equal work.
(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
(4) Everyone has the right to form and to join trade unions for the protection of his interests.

There was an excellent documentary on Nova about violence - "The Violence Paradox" presided over by Steven Pinker who claims that violence has decreased over the millennia. When the data was looked at more closely they found that there were pockets of violence within a larger area that was mostly peaceful. Where were these pockets of violence? In places where there was enormous economic inequality compared to surrounding areas and enormous poverty. Makes sense, doesn't it? Such areas as the south side of Chicago which is mostly comprised of poor African Americans living side by side with the rich areas of Lake Forest and Oak Brook. The same goes for Detroit in which the worst area to live in is Forest Park. In Forest Park 94.42% of the population is Black or African American. On the other hand Grosse Pointe Shores, a Detroit suburb is the wealthiest town in Michigan. The overall crime rate in Forest Park is 275% higher than the national average. So there you go.

The legacy of racism is still extant in the US and manifests itself in gun violence in poor neighborhoods comprised mostly of African Americans. So who is doing something about it? The main idea is could violence be treated in the same way as infectious diseases for which the most important thing is to detect the first case and cut it off there before it spreads. With violence one shooting leads to revenge shootings which lead to more revenge shootings etc so if there could be an intervention after the first shooting, then maybe the others could be prevented. So a new kind of health worker has been invented - a violence interrupter.

Safe Streets Baltimore is doing just that. These guys who know the streets identify the hot spots and intervene to try to resolve problems before they escalate. They deserve a lot of credit. They are putting their own lives at risk. They know that the precipitating factors are lack of economic opportunities, lack of education, lack of all the things they have in the wealthier communities. Cure Violence International is working on the same principles around the world. But the root problem is the same. People take to street crime because they don't have the things other people take for granted - a roof over their head, proper nutrition, education, health care including mental health care, a good job, a community that cares.

Back to my first point. Bernie Sanders and his philosophy of democratic socialism is nothing new, therefore, nothing radical. It has been made to seem that way by radical Republicans and reactionaries who hated FDR, hate the UN, hate anyone or any group that is trying to alleviate poverty and, therefore, violence in the world. But the challenge now is far worse than just the eradication of poverty and violence. If the nations of the world can't cooperate and work together to ameliorate global warming, then the whole earth and its peoples don't have a chance. This calls for putting nation state conflicts aside and massive government collaboration on a global scale. We can't afford to dither while the economic forces of the elite are all about making more billions for themselves. This goes hand in hand with eliminating poverty in the world and making the whole world a better and safer place.

What America Needs to Understand About Capitalism

Published on Saturday, July 13, 2019

by Project Syndicate

The United States has the resources to create a better capitalist system, and it is clear which policies can improve wellbeing today and create a more equitable and sustainable economy for future generations. Now the country needs to elect a president and Congress that can build this system

by Clair Brown, Simon Sällström

 

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Either Warren or Sanders would be a better bet for reform than Biden. (Photo: Shawn Thew/EPA-EFE/Rex)

The candidates in the 2020 U.S. presidential race are proposing an array of economic policies frequently described as either free-market or socialist. These labels often confuse the American public. In particular, capitalism is widely—and wrongly—understood to be synonymous with free markets. In fact, it includes all economic systems with private ownership of property, from free markets to social democracy.

These various forms of capitalism require basic rules governing how markets operate, such as protection of property and the rule of law. Most capitalist societies also have social programs to protect the most vulnerable. Governments in capitalist economies therefore face two fundamental choices. First, they can either set market rules for the common good, or delegate this task to big business under the guise of "free markets." Second, they can design universal social programs with the aim of reducing inequality and protecting the environment, or scale them back in order to minimize government spending in these areas.

The choices governments make strongly influence levels of inequality, greenhouse-gas emissions, and overall well-being. To evaluate the Democratic candidates' economic policies properly, therefore, we must understand their proposals for structuring markets and creating or expanding social programs.

U.S. President Donald Trump disparages such measures as "socialism," and instead praises free markets without acknowledging that markets need rules to function. Rather than having government set the rules, Trump prefers to let multinational corporations decide how to operate their own markets. Yet in Big Tech and many other increasingly concentrated sectors, deregulation does not increase competition; on the contrary, it allows big companies to rig things in their favor.

Consider the energy sector, where Trump has put Big Coal, Oil, and Gas in charge of U.S. climate policies. Corporate bosses now determine how much they may pollute and how fast they need to develop renewable-energy capacity, while the U.S. remains addicted to fossil fuels. In the health-care industry, big pharmaceutical companies are free to set drug prices, and large insurers reap one-quarter of the sector's revenues. The military-industrial complex rules the Pentagon, investment banks control Wall Street, and big agricultural conglomerates hold sway over America's farmland.

Market concentration allows a few large multinationals to control an industry, resulting in high prices and excessive executive pay. Big incumbents crush newcomers in order to maintain their market power, and then use excess profits to help elect friendly lawmakers and lobby for policies that support their continued dominance—often undermining the power of popular democratic movements.

Several Democratic presidential candidates have highlighted these problems. Elizabeth Warren, for example, blames big-business corruption for worsening inequality and the climate crisis, and undermining American democracy. Bernie Sanders has called for a grassroots political revolution to create a social democracy in the U.S.

Although Warren and Sanders differ on the details, both want to put government back in charge of structuring markets for the common good—including higher taxes on the wealthy and big business, along with stricter enforcement of antitrust and environmental laws. Both candidates also advocate government social programs aimed at providing everyone with health care, childcare, higher education, adequate housing, and decent jobs, along with a social safety net to support them in hard times.

Other Democratic hopefuls have also advocated some of these measures, but more centrist candidates say such programs would be too expensive or even undermine freedom, thereby echoing a standard right-wing critique. Former Vice President Joe Biden, for example, recently told wealthy donors that "nothing would fundamentally change" if he became president. Yet the U.S. capitalist system needs a major revamp in order to tackle the climate crisis and unacceptably high levels of inequality. European countries have demonstrated how broad government programs, flourishing economies, and freedom go hand in hand.

Some are mapping the way forward. Nobel laureate economist Joseph E. Stiglitz says progressive capitalism could greatly help to reduce wealth-snatching and create a more sustainable, equitable economy. And the Poor People's Moral Budget advocates progressive social programs funded via taxes and the redirection of existing federal spending.

Our research team at the University of California, Berkeley, has created the Sustainable Shared-Prosperity Policy Index (SSPI) to measure policies that support a meaningful life in a sustainable world. The SSPI ranks 50 countries based on three broad criteria: policies that structure markets with rules and taxes; measures to protect the environment; and government programs that support healthy, educated people along with the infrastructure and human rights that establish a well-functioning society. By gathering data on over 50 policy indicators, the SSPI provides a practical roadmap toward creating an economy that cares for people and the environment.

All U.S. presidential candidates should present their plans for the economy so that voters can assess how the alternatives will affect their quality of life. People need to know whether they will have access to health care, higher education, and childcare, along with a secure job that pays a decent wage and allows time for a balanced life with family, friends, and community.

This is surely not too much for citizens of a rich country to expect and demand. America has the resources to create a better capitalist economy, and we know which policies can improve wellbeing today and for future generations. Now the country needs to elect a president and Congress that can build this new system.

© 2019 Project Syndicate

Off the Top of My Head

Jane Fonda and the Campaign for Economic Democracy

by John Lawrence, November 26, 2018

There was a very interesting show on HBO recently: Jane Fonda in Five Acts. It was basically a biography of her life narrated by Jane herself. It made me recall the days of the New Left when Fonda was married to Tom Hayden and they both were very involved in the activist movement. The interesting thing though was that they started this "Campaign for Economic Democracy", and to fund it Jane did an exercise video. That video became the biggest selling video of all time so what happened to the Campaign for Economic Democracy?

It turns out that most of the money made from the videos went to support Hayden's political efforts. He mounted a losing campaign for California Senator. But as Wikileaks reports: "He and Fonda later initiated the Campaign for Economic Democracy (CED), which formed a close alliance with then Governor Jerry Brown and promoted solar energy, environmental protection and renters' rights policies, as well as candidates for local office throughout California, more than 50 of whom would go on to be elected." Hayden later served in the California State Assembly and Senate.

The New York Times reported:

Perhaps unknown to many of [the buyers of the video], they are helping finance the operations of a New Left political organization in California, the Campaign for Economic Democracy. Indirectly, they are helping the efforts of the campaign's founder, Tom Hayden, to win election in a state legislative district here that has become a kind of battleground between conservatives and the New Left.

Mr. Hayden, who was one of the most prominent of the campus radicals of the 1960's, is seeking the Democratic nomination for the 44th State Assembly District. The district includes much of West Los Angeles, Santa Monica, Malibu and adjacent coastal areas.

In an interview, Mr. Hayden, who is married to Miss Fonda, said that his efforts to win public office stem from what he sees as a need ''to respond to Reaganomics and the need to reform and revitalize the Democratic Party.''

It seems that Hayden's political career was the major recipient of the funds generated by Fonda's exercise videos. Perhaps that's OK as Hayden went on to be a progressive voice for the rest of his life including his academic career. He is the author of 19 books and died in 2016. He and Fonda were divorced in 1990. Fonda went on to marry billionaire Ted Turner although she remained politically active for progressive causes.

The New Left fizzled out in the 1970s probably because the war in Vietnam ended. Ronald Reagan put the finishing touches on the fizzle out of the New Left which at one point had been a force to behold. Hayden and Fonda in their own ways were probably smart to adapt their politics to a more mainstream position. Jane Fonda is still active and still making movies. Her movie "9 to 5" publicized the efforts of working women to gain respect in the marketplace. It stared Jane Fonda, Lily Tomlin, and Dolly Parton as three working women who live out their fantasies of getting even with, and their overthrow of, the company's autocratic, "sexist, egotistical, lying, hypocritical bigot" boss, played by Dabney Coleman.

Off the Top of My Head

The Social Contract and Discourse on Inequality

by John Lawrence

Jean-Jacques Rousseau wrote the Social Contract in 1762 in which he advocated for direct democracy. This is a democracy in which the people do not elect representatives, but vote directly. The US has a representative democracy which has opened the door for lobbying. Corporations lobby the representatives for all kinds of favors, the main one being tax breaks. These favors to corporations come into play because the US does not have a direct democracy which Rousseau advocates. Rousseau also wrote his Discourse on Inequality in 1754. In it he philosophises that private property is the origin and source of inequality.

There are two types of inequality according to Rousseau: natural inequality and moral inequality. Natural inequality we can do nothing about. People are born with various talents, abilities, personalities, good looks or the lack thereof. Nature has given each individual a different hand to play as in a card game. Then it is up to that individual to make the most of that hand. Moral inequality, on the other hand, is inequality that civil society can do something about either to redress or to make worse. According to the social contract, those having a stronger hand to play or having achieved a greater degree of success in the acquisition of private property or wealth have a duty to help the weaker members of society attain at least a decent level of existence. That is the social contract in a healthy society.

However, when those who have been successful in society, either by dint of birth or even hard work, use that success only to further feather their own nests, society breaks down, the social contract has been breached, and the illness of that society splashes out in all directions. In that case society has reached the kind of society that Hobbes envisioned, a society in which life is "solitary, poor, nasty, brutish, and short." Hobbes philosophised that it was the purpose of society to ameliorate this natural condition, but, instead, we find that many societies, including present day ones, have exacerbated this natural state of affairs.

In order for a society to maintain its health, indeed even a state of democracy, there needs to be a social contract between the better off and the worse off. This kind of social contact is absent in the US today in which the better off think that they have no responsibility for the worse off. They only have the responsibility to further their own careers by any means necessary. The meritocracy has formed an elite in which all the prerogatives and perquisites of life accrue to them in portions far exceeding what any normal person can even comprehend, consume or digest while the majority of people represent the other side of the economic divide which is opening up wider and wider.

Thus representative democracy as opposed to direct democracy has opened the door for the corporatocracy - government by corporations and the wealthy. The US is no longer governed by the people, as it says in the Constitution but by wealthy meritocrats.

50 Years After Assassination, Nation Urged to Acknowledge and Embrace MLK's Radical Vision

Published on Wednesday, April 04, 2018 by Common Dreams

"If we are to truly honor Dr. King's life and spirit, let us recommit ourselves to the fight for justice and no longer accept silence on the things that matter."

by Julia Conley, staff writer

 

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Wednesday marked the 50th anniversary of Martin Luther King, Jr.'s assassination. (Photo: Three Lions/Getty Images)

As hundreds rallied in Memphis, Tenn. on Wednesday to mark the 50th anniversary of Rev. Martin Luther King, Jr.'s assassination, progressive civil rights and anti-poverty advocates urged Americans to honor the full breadth of the leader's efforts—which went far beyond his ubiquitous "I Have a Dream" speech and pushed for the eradication of poverty and an end to the U.S. war in Vietnam.

"In this brief celebratory moment of King's life and death we should be highly suspicious of those who sing his praises yet refuse to pay the cost of embodying King's strong indictment of the U.S. empire, capitalism, and racism in their own lives," wrote social critic Cornel West in an op-ed calling on Americans to resist "sterilizing" King's legacy.

If King were alive today, West argues, he would likely be silenced due to what would doubtlessly be a firm stance against U.S. military policy, the Trump administration's aggressive anti-immigrant campaigns, police brutality, and persistent income inequality.

"King's untimely death derailed what could've been the greatest economic justice movement of our time." —A.T. McWilliams, Quartz

"Neoliberal revisionists thrive on the spectacle of their smartness and the visibility of their mainstream status—yet rarely, if ever, have they said a mumbling word about what would have concerned King, such as U.S. drone strikes, house raids, and torture sites, or raised their voices about escalating inequality, poverty, or Wall Street domination under neoliberal administrations—be the president white or black."

When King was killed at the Lorraine Motel in Memphis on April 4, 1968, he was in the city to rally sanitation workers who were fighting for fair wages and recognition of their union. The workers' struggle intersected with the issues King wished to highlight with his Poor People's Campaign, in which he hoped to find "middle ground between riots on the one hand and timid supplications for justice on the other."

The campaign represented "the beginning of a new co-operation, understanding, and a determination by poor people of all colors and backgrounds to assert and win their right to a decent life and respect for their culture and dignity," King said less than a month before he was shot. "It's as pure as a man needing an income to support his family." 

"Dr. King understood that true fairness begins with racial and economic equality," said Rep. Barbara Lee (D-Calif.) in a statement on Wednesday. "If we are to truly honor Dr. King's life and spirit, let us recommit ourselves to the fight for justice and no longer accept silence on the things that matter."

At Quartz, A.T. McWilliams wrote that the Poor People's Campaign is more relevant than ever 50 years after King's murder:

King's untimely death derailed what could've been the greatest economic justice movement of our time. Since then, American inequality has grown without interruption. The average income of the bottom half of American earners has stagnated over the past three decades, and they now account for 12 percent of U.S. wealth, while top one percent of American earners have tripled their average income...

And today, just as King propagated in his Poor People’s Campaign, government failures greatly contribute to wealth-loss across racial groups.

In the years leading up to his death, King was also an outspoken critic of U.S. military policy in Vietnam and called for "a radical revolution of values" to shift away from America's imperial impulses to subjugate the people of other nations or overthrow foreign governments.

"When machines and computers, profit motives and property rights, are considered more important than people, the giant triplets of racism, extreme materialism, and militarism are incapable of being conquered," King said in his "Beyond Vietnam" speech, delivered exactly a year before he was killed.

Martin Luther King Jr. was a nonviolent revolutionary. It is up to us to follow in his footsteps and carry forth his mission to abolish racism and poverty. #MLK50 #IAM2018 pic.twitter.com/fj3zu1cO8U

— Bernie Sanders (@SenSanders) April 4, 2018

A new generation appears poised to embrace King's legacy, as several teenagers marched 50 miles from Dundee, Mississippi to Memphis this week to commemorate the leader's work.

"Our hope is to not only honor all that Dr. King achieved, but to be part of continuing his work," Jarvis Ward, one of the teens' adult mentors, told a CBS News affiliate. "We want to show how racial justice, economic justice, and racial reconciliation can be advanced in and by the next generation."

"Dr. King called us to carry his vision forward when he said, 'Now let us rededicate ourselves to the long and bitter, but beautiful, struggle for a new world,'" said Rep. Keith Ellison in a statement. "With each march, chant, and strike, we speed up that day when justice will roll down like waters, and righteousness like a mighty stream."

 

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America's Richest 2% Made More Money in 2017 than the Cost of the Entire Safety Net

Published on Monday, February 26, 2018 by Common Dreams

Over the past year, Jeff Bezos and Mark Zuckerberg have together accumulated over $64 billion in new wealth. And the GOP want to cut food stamps?

by Paul Buchheit

 

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In just one year, just two men—Facebook founder Mark Zuckerberg and Amazon founder Jeff Bezos—made enough from their investments to feed most of America's hungry. (Photo: Justin Sullivan (left) / David Ryder (right) / both from Getty Images)

How was their money made? Almost entirely by passively waiting for the stock market to go up. The data sources for this report are Forbes and Credit Suisse, both of which provide precise numbers for the worsening surge in America's wealth inequality. 

U.S. wealth increased by $8.5 trillion in 2017, with the richest 2% getting about $1.15 trillion (details here), which is more than the total cost of Medicaid (federal AND state) and the complete safety net, both mandatory and discretionary, including the low-income programs that make up the social support package derisively referred to as 'welfare.' 

"American inequality is extreme, shameful, perverse, and growing."

Surprisingly, the richest 1% did not increase their wealth by much in 2017 (although they took nearly $4 trillion in 2016). That means the second half of the richest 2%, Americans with an average net worth of approximately $10 million, outgained the safety net all by themselves in the past year.

Another stunner: The richest 2-5%, those Americans with an average net worth of about $2.5 million, accumulated enough wealth in 2017 to pay for the safety net FOUR TIMES.

Two Men Made More Money than the Total Cost of Food Stamps 

Food stamps provide about $1.50 per meal for 42 million Americans, mostly children, the elderly, and the disabled, at a cost in 2017 of $64 billion. In the past year Jeff Bezos and Mark Zuckerberg have together accumulated over $64 billion in new wealth. 

Jeff Bezos has used tax havens and high-priced lobbyists to avoid the taxes owed by his company. Mark Zuckerberg created a 'charitable' foundation, which in reality is a tax-exempt limited liability company, leaving him free to make political donations or sell his holdings, all without paying taxes. But in one year the two of them made enough from their investments to feed most of America's hungry. 

And Republicans Are Cutting Food Stamps? 

The Republicans think the food stamp program is too costly and ridden with fraud. Apparently $1.50 per meal for children and seniors is too costly for them. As for fraud, the U.S. Department of Agriculture has estimated that only 1 penny of every food stamp dollar is used fraudulently. To complete the insult and the injury, Republicans want to drop care packages on millions of Americans, as if they were third-world aid recipients, unable to make their own decisions. 

American inequality is extreme, shameful, perverse, and growing.

While over 100 million (2 out of 5) American adults are among the world's richest 10%, up to 50 million (1 out of 5) American adults are among the world's poorest 10%. 

Yet by some unfathomable measure of ignorance or malice, Republicans cheer on the millionaire-making stock market while telling the most vulnerable Americans that they're spending too much on food.

 

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Paul Buchheit is a college teacher, an active member of US Uncut Chicago. His latest book is, Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income. He is also founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org),  and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul [at] UsAgainstGreed [dot] org.

Economist Kenneth Arrow, Nobel Laureate, Dead at 95

by John Lawrence

Was Arrow's Impossibility Theorem an Endorsement of Free Market Capitalism?

Kenneth Arrow, Nobel prize winning economist, passed away February 21, 2017 at the age of 95 at his home near Stanford University where he was Professor Emeritus. He was the youngest person ever to win the Nobel prize. Dr. Arrow made many academic contributions, but chief among them was his Impossibility Theorem. It is an example in my opinion of the over mathematization of the social sciences. As such it is absolutely elegant and correct as a mathematical theorem, but it's implications on a practical level, that capitalist economics and representative government are the best a society can do, even Arrow would not defend in later life. In fact he suggested at the age of 90 that further research would come up with ways to work around his system if not to discredit it altogether. However, the damage had already been done. Capitalism, as evidenced by his nephew, Larry Summers, was exalted and welfare economists and political reformers were stopped in their tracks.

Larry Summers is an economist and President Emeritus of Harvard University. He served as the 71st Secretary of the Treasury for President Clinton and the Director of the National Economic Council for President Obama. He was the one who pushed Clinton for deregulation of the Glass-Steagall Act which led directly to the 2008 financial meltdown. When he was President of Harvard, he gained notoriety for a sexist remark in a 2005 speech in which he suggested that the under-representation of women in science and engineering could be due to a "different availability of aptitude at the high end," and less to patterns of discrimination and socialization. Summers evidently took his uncle's Impossibility Theorem to heart and championed free market capitalism. An encomium to his uncle can be found here.

Plurality Voting Holds in Most US Elections

Dr. Arrow said in an interview in 2012:

“I think the answer is you have to ask, in effect, which ones get closest to this combination? And we have to then begin to look at what actual votes are. The real way we do this is to apply some rule and to take elections and apply different methods and see what violates these conditions as little as possible. Remember all we’re saying is there could be a [violation]. We’re not saying you’re always getting a violation of these rules.”

What Arrow was saying is that there are other political and economic systems that, while not perfect according to his criteria, were nevertheless possibly better than what we have today. In fact Arrow decried the pitfalls of winner-take-all (plurality) voting which does satisfy his criteria. It chooses one winner out of a number of candidates and is the method used in almost all US elections including the election for President.

Arrow had this to say about plurality voting:

“I think plurality voting leads to very unsatisfactory solutions in a number of cases. Now, there is a problem which certainly my social choice theorem didn’t address and a lot of discussions don’t address about elections, which is the long-run implications of an electoral system on parties.

“Partly, if you have a plurality system, you’re kind of driven to a two-party system. If a party splits, both factions lose because they’re less likely to get a plurality. So there’s some pressure to create two-party systems.

“Now some people have argued that two-party systems are a good idea. And others say no. It stifles innovation. It stifles real contest. New ideas are suppressed in a two-party system. I’m inclined to the latter view that if there really are a number of political positions, it’s better they be raised explicitly.

“The plurality system chokes off free entry. In other words, in the economic world we’re accustomed to the virtues of free entry. We don’t want a small number of corporations to be dominant. We favor the idea of new firms entering in order to compete to bring in new ideas, to bring in new products.

“Well, the same way in the political field. We should be encouraging free entry, I think, in order to have new political ideas come in. And they may flourish. They may fade. That’s what you want, them to be available.

“So I’m inclined that the plurality system will choke off by encouraging, the two-party system will choke off new entry. So I’m really inclined to feel that we don’t want plurality as a voting system. It’s likely to be very stifling."

Social Choice: Mathematics Meets the Social Sciences

Social choice is an esoteric, abstruse and specialized subject generally only of interest to the academic community and then only to those interested in political or economic science. In this article I will try to simplify the concepts and point out how they could be applicable in developing more democratic political and economic systems. In 1951, Kenneth Arrow published his book, Social Choice and Individual Values, in which he claimed that the amalgamation of individual choices whether in a political system (voting, for example) or in an economic system (consumer choice, for example) to form an overall social choice (such as the winner of an election, for example) was impossible if you postulated a simple set of (supposedly) rational and ethical criteria. As Arrow stated in the first sentence of his book, "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." He goes on to say, “The methods of voting and the market … are methods of amalgamating the tastes of many individuals in the making of social choices.” They are similar in that both involve collective choice among a limited range of alternatives.

Arrow than went on to make a lengthy mathematical analysis, at the culmination of which he asserted that social choice was impossible. This has come to be known as Arrow's Impossibility Theorem. For this and other work in a distinguished career, Arrow won the Nobel prize in economics in 1972. The fact that social choice was apparently impossible put the kibosh on any further work in this field and led to much despair among voting theorists and welfare economists. If there is no rational way to make social decisions based on the amalgamation of individual ones, not only welfare economics but any hope for economic democracy is ruled out. Also democratic voting systems other than majority rule in first-past-the-post (plurality), one member districts are ruled out. The dichotomy between political and economic systems remains with the implication being that representative democracy and capitalist economics are the best systems that can be attained. Amartya Sen in his Nobel Prize acceptance speech said, "Two centuries after the flowering of the ambitions of social rationality, in Enlightenment thinking and in the writings of the theorists of the French Revolution, the subject seemed to be inescapably doomed."

Getting Down to the Nitty Gritty

Let's take a look at Arrow's analysis. As a simple example let's take a voting system in which there are three candidates: A, B and C and three voters: 1, 2 and 3. Arrow postulates that each voter will rank the candidates in order of preference ^i.e. A is preferred to B is preferred to C would be indicated ABC. One of Arrow's criteria is that for every possible arrangement of voter preferences there should be a unique social choice consisting of one and only one ranking, for example, ABC.

So what about the case when voter 1 votes ABC, voter 2 votes BCA and voter 3 votes CAB? If we let ABC be the social choice, we notice that two out of three voters preferred C to A so that can't be it. Likewise for BCA and CAB. This phenomena is called the paradox of voting and was discovered by the Marquis de Condorcet in the 1700s. Arrow could have stopped right there and said that social choice was impossible according to his terms, but he didn't. He went on to mathematicize the heck out of the problem reaping much credit in the process. The stopped progress in social theory is at least partly due to the fact that no one has been able to come up with a more elegant mathematical analysis!

But wait a minute. Is Arrow's set-up of the problem even realistic? I say it's not. Arrow demands that a social choice be a complete ordering such as ABC. That's neither realistic nor necessary. For multiple candidates and multiple winners, all that's necessary is to know which ones are in the winning set, not their order. For instance, if A, B, C and D are candidates, and the outcome produces two winners rather than one, the only necessary information is which two winners, not their ordering. If A and B are both winners such as in a two member district, for example, we don't need to know if A is preferred to B or vice versa.

Proportional Representation is a voting system for choosing multiple winners and has been around for years. Whereas first-past-the-post (plurality), single member districts lead to a two party system, Proportional Representation induces a multi-party Congress or Parliament in accordance with the percentage of votes received by the party. While a big improvement over majority rule, proportional representation has no theoretically optimal underpinning.

Arrow states: "In the theory of consumer's choice, each alternative would be a commodity bundle; ... ; in welfare economics, each alternative would be a distribution of commodities and labor requirements." It is clear that in consumer's choice, the collective choice mechanism would narrow down the possible number of commodity bundles to a "limited range of alternatives" in which case there would be no need to order each alternative in the "limited range." Consumers would just choose the commodity bundle that represented their highest preference.

So Arrow's fundamental assumptions were somewhat arbitrary to say the least. But other academics were so impressed with his mathematical prowess that they gave him the Nobel Prize. And evidently Arrow, rather than continuing work which might have shown the limitations of his Impossibility Theorem, was content to sit on his laurels and be a respected professor at Stanford University, a conservative enclave if there ever was one. (Truth in advertising: I'm a graduate of Stanford University.)

Economic Democracy, Co-ops and Shift Scheduling

As for welfare economics, there are also implications of social choice for economic democracy. We envision cooperative enterprises in which worker/owners freely choose their shift and pay preferences from the totality of possibilities in accordance with a social choice mechanism which maximizes collective satisfaction among all worker/owners. Today already shift scheduling software is available for nurses on a first come, first served basis. In a profit making environment the scheduling software is more about reducing overtime costs and costs in general than it is about maximizing shift satisfaction among employees, but that would change in an employee owned enterprise.

Arrow assumes that all information will be gathered from the voters or worker/consumers in the form of rankings (A is preferred to B is preferred to C etc). However, there is another form of indicating preferences over candidates and that is ratings. A citizen can indicate preferences by rating candidates on a scale consisting of real numbers between zero and one or minus one and plus one. The scale itself is arbitrary. Then the social choice is made by adding up the numbers for each candidate over all individual choosers. This is called utilitarian voting. Clearly, this method will yield consistent and rational results. It is also called range voting or score voting which was reinvented by Warren D. Smith. Utilitarianism as a philosophy was invented by Jeremy Bentham and John Stuart Mill, 19th century English philosophers, who defined their system as "the greatest good for the greatest number."

Two guys, Brams and Fishburn, came up with a method of voting called approval voting. They said just give every candidate you approve of a one and all others a zero and then tally up the votes. The candidate with the highest number of votes was declared the winner. The problem is how do you choose which candidates to approve in an optimal manner?

I have had a lot of animosity towards Arrow in my lifetime because of his Impossibility Theorem. I have a website dedicated to proving him wrong. Why didn't he go on to study what was possible even if it wasn't perfect according to his seemingly rational (but not really) criteria? There must be a workaround or a compromise for surely nothing is really impossible. But how dare I or anyone else criticize such a formidable mathematical analysis? Well, I do. Did the conditions he set up doom his theoretical outcome to failure? I think so. Did Arrow stop there because he was an apologist for the capitalist system and the traditional US method of voting? Did he bask in the approval of free market capitalists who liked nothing better than for someone to prove theoretically that any system other than capitalism was fatally flawed? I think so. Did he gain brownie points because he supposedly proved that the American political system rested on a firm theoretical footing while parliamentary democracy did not? You bet.

Ah well, may he rest in peace and may other economists and political scientists not be stymied by his overly mathematical but soulless result. As it turns out Arrow's conditions don't have much to do with the real world. His analysis represents a theoretical result which amounts to proving how many angels can dance on the head of a pin. I guess the Nobel committee was impressed by such mathematical legerdemain.

Is the Green Party a Good Alternative?

by John Lawrence from the San Diego Free Press

Noam Chomsky advocates voting for Dr Jill Stein of the Green Party in states which are securely Democratic and voting for Hillary in swing states where every vote counts. This makes a lot of sense to me as it's one way, maybe the only way, to build a third party in this country. Due to our antiquated voting system, a third party can never be successful. However, it could conceivably replace one of the two present day mainstream parties at some point.

Jill Stein stands for a lot of the things that Bernie and other Progressives stand for. But even if, by some stretch of the imagination, she were to be elected in November, she would still face a Republican Congress. Hillary is right when she seeks to tone down Bernie's rhetoric and make more modest claims because, if elected President, she will face an intransigent Congress which will thwart her at every turn. Even though the Dems might be able to take back the Senate, it will not be filibuster-proof, and they probably will not be able to take back the House. So the Repubs will block all the good stuff in the Democratic party platform, and Hillary will be blamed for not delivering what she had promised.

If Hillary is not able to implement any bit of the Democratic platform, a platform shaped by Bernie Sanders, the high expectations of those who will vote for her will be smashed with the result that people will turn on her, and Donald Trump could come back to haunt us in four years.

Dr Jill Stein doesn't have that dilemma. She can state her positions clearly and unequivocally knowing that she will never have to try to get them implemented because she probably will never gain the Presidency. But still it's worthwhile to get those viewpoints out there before the public and let the public ruminate on them the same way Bernie Sanders did. If he had gained the Democratic nomination, he would have been in even worse shape than Hillary who at least had the perspicacity to tone down claims of what she would do as President to be somewhat more in tune with reality.

What does Jill Stein Stand For?

So what does Dr Jill Stein stand for? Here is a sampling:

1) Guarantee economic human rights, including access to food, water, housing, and utilities, with effective anti-poverty programs to ensure every American a life of dignity.

This is none other than the implementation of Article 25 of the 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.

Economic human rights are something Republicans are dead set against. They say it's not in the Constitution and it's unAmerican; only political rights are mentioned in the Constitution. Jill Stein's plan to implement economic human rights would end poverty and guarantee everyone a basically decent existence. The crux of the matter is that those of us who have been fortunate enough to accumulate great wealth should use some of that wealth to support those of us who are less fortunate, not by means of philanthropy or charity, but through the intermediary of government and the tax code. So far human greed has made this outcome impossible. Will human nature change and in particular the American psyche become less selfish? We'll see, but I wouldn't count on it. It would entail rewriting the Constitution to reflect those values.

2) Create living-wage jobs for every American who needs work, replacing unemployment offices with employment offices. Advance workers' rights to form unions, achieve workplace democracy, and keep a fair share of the wealth they create.

In Sweden unemployment offices have been replaced by employment offices. These offices can be found in Stockholm and other cities and towns and are state run. In order to get a job all one must do is go in to this office, input one's qualifications and credentials, and they will help you search a database of every available job in the whole country. If a suitable job comes up, the applicant has a right not to accept it, and a new search is undertaken. However, after three rejections, his or her welfare is cut off. In other words you have to accept one out of three proposed jobs or else. This extensive job search should be implemented in this country in order to facilitate everyone's working to the greatest extent possible. If no suitable private sector job can be found, then public sector jobs at minimum wage can be created. There's no end of trash that needs to be picked up along the streets and freeways. I'm sure productive jobs can be created ala FDR's Civilian Conservation Corps and Works Progress Administration.

3) Create millions of jobs by transitioning to 100% clean renewable energy by 2030, and investing in public transit, sustainable agriculture, and conservation.

Global warming is serious and needs to be addressed in a serious manner. Dr Stein's platform would do this although the date needs to be moved up to 2025.

4) Establish a foreign policy based on diplomacy, international law, and human rights. End the wars and drone attacks, cut military spending by at least 50% and close the 700+ foreign military bases that are turning our republic into a bankrupt empire. Stop U.S. support and arms sales to human rights abusers, and lead on global nuclear disarmament.

The US has to be weaned away from being the world's foremost militarist nation if there is ever to be peace on the planet. Peace making activities such as the Peace Corps need to be stepped up. The money saved by slashing the military budget and closing bases can be used to transition to renewable energy and provide other social benefits.

The US military bases in almost every country of the world give credence to the fact that the US is an occupying power that occupies the whole world. It's world domination pure and simple, something we fought against in WWII when the Axis powers tried to do it. A lot of these countries, for example the Phillipines, don't want our bases on their territory. Converting US military occupation to Peace Corps related activities would go a long way to creating world peace. We create enemies and then beef up the military budget to defend against them. Even Russia has been recreated as a new old enemy when friendship would have been and still is possible. Those in power miss the good old days of the Cold War; they want it back so bad.

5) Establish an improved “Medicare For All” single-payer public health insurance program to provide everyone with quality health care, at huge savings.

With Aetna pulling out of Obamacare, Obamacare's days are numbered. The big insurance companies are not interested in playing that game leaving the whole program in jeopardy. It was a jury rigged, Rube Goldberg jumble of incompatible compromises in the first place. Medicare-for-all is the only sane solution. Let's get on with it.

6) Abolish student debt to free a generation of Americans from debt servitude. Guarantee tuition-free, world-class public education from pre-school through university. End high stakes testing and public school privatization. 

5) and 6) agree with Bernie Sanders' proposals.

7) Set a $15/hour federal minimum wage. Break up “too-big-to-fail” banks and democratize the Federal Reserve. Reject gentrification as a model of economic development. Support development of worker and community cooperatives and small businesses. Make Wall Street, big corporations, and the rich pay their fair share of taxes. Create democratically run public banks and utilities. Replace corporate trade agreements with fair trade agreements.

The Federal Reserve created $17 trillion out of thin air via a few keystrokes on a computer in order to bail out the big banks, domestic and foreign, in the 2008 financial crisis. It's obvious they don't know what they're doing. They're in uncharted waters, and the only thing they know is to preserve the system as it already exists until the next financial crisis. That's the only time when things might change. Until then they are holding on to the current system such that it is for dear life.

The Rich Need to Pay Taxes Sufficient to Reduce Inequality

The rich need to pay their fair share which I define as sufficient to diminish income and wealth inequality. If the US is to remain a democratic country and not become a plutocracy, this needs to happen.

Reagan's and Alan Greenspan's tax breaks for the rich had a lot to do with the increasing economic divide between rich and poor. The balance needs to be regained by taxing the rich to support the poor until wealth and income is more evenly distributed.

There are other parts to Dr Jill Stein's plan, but the above are the main "planks" in my opinion. She mentions public banking which I have written about extensively in the San Diego Free Press. The champion of public banking is Ellen Brown who has run on the Green Party ticket previously for State Treasurer of California. Public banking is an important concept that would make it possible for the US and its citizens to get away from the debt based economy they now suffer under. It also is a non-violent way to diminish the power Wall Street has over the economy.

In Ellen's latest blog: Can Jill Carry Bernie’s Baton? A Look at the Green Candidate’s Radical Funding Solution she says:

Bernie Sanders supporters are flocking to Jill Stein, the presumptive Green Party presidential candidate, with donations to her campaign exploding nearly 1000% after he endorsed Hillary Clinton. Stein salutes Sanders for the progressive populist movement he began and says it is up to her to carry the baton. Can she do it? Critics say her radical policies will not hold up to scrutiny. But supporters say they are just the medicine the economy needs.

...

As with Sanders’ economic proposals, her plan has been challenged as unrealistic. Where will Congress find the money?

But Stein argues that the funds can be found. Going beyond Bernie, she calls for large cuts to the bloated military budget, which makes up 55% of federal discretionary spending; and progressive taxation, ensuring that the wealthy pay their fair share. Most controversial, however, is her plan to tap up the Federal Reserve. Pointing to the massive sums the Fed produced out of the blue to bail out Wall Street, she says the same resources used to save the perpetrators of the crisis could be made available to its Main Street victims, beginning with the students robbed of their futures by massive student debt.

If the Fed Can Create Money for Wall Street, They Can Create It for Main Street

The Fed came up with trillions of dollars to bail out Wall Street and they did it with a couple keystrokes on a computer. So why can't the same thing be done for Main Street? Dr Jill Stein and Ellen Brown say it can. Bernie Sanders demanded that the Government Accounting Office conduct an audit of the Fed which revealed that it had provided a whopping $17 trillion to bail out American and foreign banks during the economic crisis. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else,” said Sanders in a press release.

If the Fed can create money that it doesn't really have just by a few keystrokes on a computer and give it to the rich, it begs the question why can't the Treasury Department issue the money directly to the people? Right now they are forbidden by law from doing so, but there is a way around this since the Treasury can issue coins. It has been proposed that the Treasury could mint a trillion dollar coin and then go from there. Better yet change the law so that the Treasury Department, not the Wall Street controlled Fed, has control over the money supply. If it did this, it wouldn't have to borrow money and pay interest on its bonds which goes mainly to Wall Street. Taxpayers would save billions of dollars in interest charges. Ellen continues:

The alternative is to do what governments arguably should have been doing all along: issue the money directly to fund their budgets.

Central bankers have largely exhausted their tool kits, prompting some economists to  recommend some form of “helicopter money” – newly-issued money dropped directly into the real economy. Funds acquired from the central bank in exchange for government securities could be used to build infrastructure, issue a national dividend, or purchase and nullify federal debt. Nearly interest-free loans could also be made by the central bank to state and local governments, in the same way they were issued to rescue an insolvent banking system.

Just as the Fed bought federal and mortgage-backed securities with money created on its books, so it could buy student or other consumer debt bundled as “asset-backed securities.” But in order to stimulate economic activity, the central bank would have to announce that the debt would never be collected on. This is similar to the form of “helicopter money” recently suggested by former Fed Chairman Ben Bernanke to the Japanese, using debt instruments called “non-marketable perpetual bonds with no maturity date” – bonds that can’t be sold or cashed out by the central bank and that bear no interest.

The Bernanke proposal (which he says could also be used by the US Fed in an emergency) involves the government issuing bonds, which it sells to the central bank for dollars generated digitally by the bank. The government then spends the funds directly into the economy, bypassing the banks.

The US government need not borrow money for its expenditures thus driving up the national debt. It could issue the money directly essentially the way the Fed did. The Fed then bailed out the banks, but won't bail out Main Street. The Federal government could do just that: provide money interest free for rebuilding infrastructure, buying up student loan debt and other worthwhile activities. The result would be increased economic stimulus and full employment. This coupled with a financial transactions tax on Wall Street, eliminating the "carried interest" loophole for hedge funds, would decrease the economic divide between the 1% and the 99%.

Bernie Sanders had the right ideas; Jill Stein has the right ideas. But none of these ideas can be implemented with a corporate controlled Congress which likes things just the way they are. After all it serves their interests very well. They are getting rich off it, and they could care less about the middle class or the poverty stricken. The Repubs have their southern "tribe" locked up and fully imbued with the idea of voting against their own interests. They are busy ginning up anger against the less rugged. This seems to be sufficient for getting people to vote against their own interests. Corporate Democrats like their perks too like going to work as lobbyists after they quit their "public service."

The Co-op Movement - Democratizing the Ownership of Wealth One Step at a Time

by John Lawrence

It has finally dawned on the American consciousness that wealth is being concentrated among fewer and fewer people. In fact just 400 Americans own more wealth than the bottom 180 million taken together. Thomas Piketty in his ground breaking book, "Capital in the Twenty-First Century", shows the dynamic behind this dramatic rise in wealth among the upper echelon of society while everyone else, in particular the middle class, is being left in the dust.

It wasn't supposed to happen this way. Labor saving devices and later computers and automation were supposed to create a virtually utopian society in which everyone could work less and have an ever increasing standard of living. Instead, we have created a dystopian society where the fact that there is less need for workers means that unemployment is much more widespread. Instead of wealth being ubiquitous, unemployment is. The goal should have been widespread or democratized wealth resulting in less of a need for individual labor because each individual or family would be able to derive much of their income from their wealth in the form of a Return on Investment (ROI) just like the "wealthy" do.

When I was a kid, I read a comic book story about the ideal family situation. In many ways the author had it right. Labor saving devices (computers and robots had not been invented yet) did all the household work. A dispenser on the wall coughed up several thousand dollars every month. There was no need for work at all. The only hitch was that the family was not allowed to go out of the house. Ouch. But were it not for that caveat, this story, projected into the future, was the idea of how future generations would live - basically the way the wealthy have always lived. With the internet, money can easily be spent and packages delivered without ever leaving the house although the author could not have even envisioned that scenario. If wealth were democratized instead of concentrated among a very small group of people, everyone would indeed be living that lifestyle today - working only a few hours per week and deriving most if not all of their income from accumulated wealth.

So what is the solution to this dystopia we have created? Some call for a revolution, a top down radical change at the national level, that will filter down to all levels of society. It was tried at least once and it didn't work. The Soviet Union was an acknowledged failure, and the French revolution ended up in Napoleon's dictatorship - hardly a Republic. Alternatively, others are calling for the step by step, bottom up creation of a society in which organizations and enterprises are owned cooperatively, in which everyone is a worker/owner. The surprising thing is that this is being done in the present tense and is a movement which is well under way although the mass media would never tell you about it. Why? Because it is threatening to the ossified status quo that just wants to continue amassing wealth for themselves, and they have a well oiled (pun intended) system for doing so. They do not want a society composed of worker/owners; they want a society composed of consumers of their well established product lines.

Consumption is 70% of GDP. Every politician wants this figure to go up when, for envronmental reasons, it needs to come down. Fossil fuels need to be left in the ground if we are to escape the worst effects of global warming. Increasing GDP under the present system means increasing greenhouse gasses due to increasing energy demands. Decreasing GDP - and concomitant energy demands - means giving up trillions of dollars of coal, oil and gas investments that the extractive industries have already made and foregoing revenues and stock values that they are counting on. This is something Wall Street would frown on, and the energy companies would likely be sued by their investors.

The co-op movement has the advantage of not requiring a top down revolution and is the most promising way for democratizing the ownership of wealth because it doesn't require any laws to be changed. It doesn't require any lobbying; it doesn't require any violence except maybe to the bank accounts of Wall Street and the fossil fuel industry. It represents a progressive systemic change in society that is well under way. That's important because the US political system has been characterized as being in gridlock. That's a very charitable description indeed because in actuality it's not in gridlock; it's in dysfunction. The fact that the US is completely dysfunctional on a national level makes a strategy of localization all the more important. What is needed is an economy that is built on the local level one enterprise at a time by and for local citizens.

The way the economy works now is that large international corporations take money out of the local economy and concentrate it in the bank accounts of a few wealthy people. For instance, consider Wal-Mart. The Walton family heirs collectively are the richest single family in the US. Profits from local Wal-Mart stores do not go back into the local communty. Instead they are siphoned off from the local communities in which Wal-Marts are located and sent to Bentonville, Arkansas, Wal-Mart corporate headquarters, and from there they go into the pockets of the Walton family heirs who invest them on Wall Street. They don't spend them in the local economy or indeed in any economy because they've got so much money, they can't spend it all. Instead, it just piles up as stagnant investments in the financialized economy. A co-op would not send the profits out of the local community but instead they would go into the pockets of the worker/owners of the enterprise who would spend them in the local community with the result that money would be circulated locally instead of being siponed off in one shot and ending up in the pockets of a few of the aforementioned 400 richest individuals in America.

The same applies to other international corporations that have replicated themselves throughout the US and indeed throughout the world. They have replaced the local Mom and Pop stores which were locally owned and from which profits circulated among local enterprises many times instead of going to Wall Street in one fell swoop. The co-op movement represents a shift back to local rather than international corporate ownership and a movement away from the concentration of wealth to a more democratized distribution of wealth.

There is no reason why a local co-op could not provide the same services as does a Wal-Mart or a Home Depot or a Walgreen's or a Fry's electronics, companies which have metastasized themselves worldwide resulting in a concentration instead of a localization of wealth, for after all, all they are doing is buying products wholesale and selling them retail. It's not rocket science. It just takes an ability to unload trucks and stock store shelves. Computers do the rest including even checkout!

There are many examples of successful co-ops already in existence.There are a number of worker owned businesses in the state of Ohio, for example. In 1977 a very large steel mill in Youngstown was closed down resulting in 5000 workers losing their jobs. Long story short: the workers and the community got together and put the steel mill back into operation as a worker owned enterprise. There is a support system for the establishment of worker owned businesses at Kent State University called the Ohio Employee Ownership Center. They provide assistance to workers who want to own their own factories and stores and other businesses. Many successful businessmen, aided by favorable tax benefits, now sell their businesses to their former employees when they retire. 

Gar Alperovitz reports in his book, "What Then Must We Do?" the following information:

As time has passed, new priorities and another set of alliances have begun to develop. Now, all of the linked worker-owned companies are very, very green by design. For instance the Evergreen Cooperative Laundry [part of Evergreen Cooperatives, a group of worker-owned businesses launched by Cleveland’s largest foundations and anchor institutions] operates out of a LEED Gold-certified building and uses (and has to heat) around one-third the amount of water that other commercial laundrys use and heat. Evergeen Energy Solutions is poised to install twice as much solar capacity in the coming period than currently exists in the entire state of Ohio. And Green City Grocers Cooperative - a three-and-a-quarter acre hydroponic greenhouse (the largest in any American city) - currently produces some three million heads of lettuce a year along with hundreds of thousands of pounds of herbs. (Two new cooperative businesses are scheduled to come online each year as the building processes continue.) Then there is Organic Valley, the $500 million leader in the organic dairy industry, which is also a cooperative of family farms.

It should be obvious that worker owned co-ops are very involved in the communities in which they operate unlike international corporations whose only allegiance is to the bottom line. In fact they can be sued by their investors if they should have the audacity to deviate from the bottom line and try to do some good in local communities.

Co-ops come in many different organizational forms from credit unions with very little democratic participation to forms in which worker owners are directly involved in decision making. For example, there is the B corporation, legal in California but not in every state, which allows the corporation to not be totally addicted to pursuing the bottom line. These corporations are allowed by law to be do gooders in the communities in which they operate. Patagonia Corporation, the outdoor apparel and sporting equipment retailer, is an example

More than 130 million Americans - 40% of the population - are members of one or another form of cooperative. Some of these are agricultural and electrical co-ops dating back to the New Deal in the 1930s. The outdoor recreational company, REI, is a co-op as is hardware purveyor ACE Hardware. In Madison, Wisconsin there is a worker owned cab company, Union Cab, with over 200 worker/owners and annual revenues of over $7 million. I could go on and will in another article.

In San Diego there is the Market Creek Plaza, a $23.5 million cultural and commercial project anchored by a shopping center. The initial public offering was limited to neighborhood residents who are accumulating wealth as the share price goes up. A total of 415 investors representing 600 residents and other non-profit and for-profit organizations purchased shares at the outset. A new neighborhood foundation owns another 20% of the shopping center thereby providing a funding stream for future community wealth-building efforts. The Jacobs Foundation which initiated the project intends to exit in 2018 with ownership to be split among community residents and the neighborhood foundation.

There is also The Village at Market Creek. From their website:

The Village at Market Creek was given Gold status because it demonstrates what can happen when residents own the vision and are involved in the decision making process from the beginning. The Diamond Neighborhoods of southeastern San Diego are among the most culturally-diverse communities in the nation. Located just minutes from San Diego's thriving downtown area, these neighborhoods have endured decades of disinvestment. Once defined by widespread blight, this community is undergoing a resident-led renaissance.

As the result of a unique partnership between neighborhood residents, the Jacobs Center for Neighborhood Innovation (JCNI), and a large network of local and national investors, these abandoned sites are being transformed into a thriving commercial, residential, and cultural center known as The Village at Market Creek.

Good things are happening in San Diego, around the country and indeed around the world. The Mondragon Corporation, the grandaddy of all co-ops located in Spain's Basque Country, has over 80,000 owner employees, annual revenues of over $14 billion euros, assets of $35.8 billion and operates 257 businesses and co-operatives worldwide. More on Mondragon here.

So the co-op movement is a step by step approach to build economic democracy and widely distributed wealth ownership from the ground up. It is a movement well under way and expect to see a lot more reported here in future editions of the San Diego Free Press.

Economic democracy in the 21st Century

Tom Malleson 15 August 2014           from opendemocracy.net

            

Workers co-ops, public banks and participatory budgeting have all been shown to be successful and efficient. It's time to take democratic control of our economy.

Occupy Wall Street poster, wikimedia

Three years ago a ragged band of activists gathered in New York City’s Zuccotti Park to protest economic injustice and inequality. Three months later, the Occupy Wall Street movement had spread to 951 cities in 82 countries around the world, dramatically illustrating a widespread and deep concern with contemporary levels of inequality – the highest since the 1920s and the age of the Robber Barons. Of all the plans and projects that bubbled out of the Occupy movement, one of the most powerful was that of “economic democracy”. Economic democracy became a unifying theme of Occupy because it provided both a series of practical reforms as well as an overarching critique of what was wrong with contemporary capitalism, both a means and an end. Today, long past Occupy, the ideas of economic democracy remain as potent as ever.

There is a paradox at the heart of contemporary capitalism. Societies in the West are fervent about their democratic credentials. Our politicians give speeches extolling the virtues of democracy, our self-conception of being citizens in a democratic state is deeply ingrained in our identity. And yet, despite this, a central part of society, the economy, has very little democracy in it at all. Workers do not elect the managers of their firms. Bankers do not allocate finance with any accountability to the communities in which they operate. Investment decisions are not made with any participation of the citizenry. It is like we have erected a wall down the middle of society, and said that in this half, the economy, there is no need for democracy, while at the same time insisting on calling society as a whole “democratic.”

A fundamental democratic principle is that public power should be accountable to those who are affected by it (i.e., the public). This is a basic safeguard against tyranny and one of the most fundamental rationales for having democracy at all. Yet in a variety of ways, managers, employers, investors, and financiers clearly exercise power too. Their decisions have massive social and public consequences—from a manager’s decision to lay off a thousand workers, to a corporate decision to invest in dangerous deep sea oil extraction, to bankers’ decisions to provide risky subprime mortgages and resell them as complex debt instruments – these decisions have undeniable public consequences. Yet in stark contrast to our political system we do not demand that these people be accountable to those affected in any standard democratic way.

The core idea of economic democracy is that wherever there is power there should be accountability. In contemporary society, economic power is exercised in three main areas: workplaces (where bosses and managers exercise significant power over workers), financial organizations (where banks and money markets exercise significant power through their control over lending or refusing credit), and investment (where business owners exercise significant power over the nation’s citizens through their ability to invest or divest causing the economy to grow or falter). 

The power that is exercised over workplaces, finance, and investment is for all intents and purposes political power, since it involves public, sustained relationships of authority and subordination, resulting in fundamentally different levels of freedom for different people. Unaccountable, unequal political power in a democratic society is unjustifiable, and so new economic arrangements should be experimented with in order to allow these sources of power to be accountable to the citizenry on a formally equal basis. The essence of economic democracy is that we should strive to democratize these three areas. There are no shortage of ideas for moving in this direction, but here I’ll focus on three fundamental ones: worker cooperatives, public banks, and participatory budgeting. 

Worker Cooperatives

Worker cooperatives are firms that are owned and controlled by the workers themselves. In small co-ops the worker-owners may make decisions collectively, whereas in large ones they elect a management structure.

The co-op sector in the UK makes up less than 1% of firms. The most well-known worker cooperative in the UK is the John Lewis Partnership, which is technically an employee-owned firm, though it has been sharply criticized for having very little actual workplace democracy in it. Although the worker co-op sector is small in the UK, it’s a bigger player elsewhere. In Emilia Romagna, a prosperous region in northern Italy, 13% of the regional economy is co-op based. Many of the cooperatives have been around for decades, and many others are industry leaders in construction, agriculture, food processing, wine making, transport, retail, and machine production. 

The Mondragon network in the Basque country of northern Spain is the most famous example of a worker co-op. In 1956, five young workers, with the help of a progressive Catholic priest, bought an abandoned stove factory and started producing as a cooperative business. Today, Mondragon is a giant multinational enterprise with a network of 110 co-ops employing 80,000 people, with assets of €35 billion. Each of these 110 co-ops is an autonomous worker cooperative, meaning that the workers collectively own the firm and elect their Board of Governors on a one-person one-vote basis. In addition, delegates from each firm are elected to represent their co-op at Mondragon’s Cooperative Congress, which is like a mini-parliament overseeing the system as a whole. 

There is a widespread suspicion about worker co-ops that they are inefficient (people in the UK are especially prone to think this since it’s likely that their only experience with a co-op is with the occasional small alternative coffee shop or radical DIY bike store). But in fact this is a misperception. The evidence is clear: when co-ops and capitalist firms are scientifically compared (in a careful, controlled way), economists over the last thirty years have found co-ops to be just as efficient as comparable capitalist firms. Co-ops have been found to have just as high productivity all over the world, in the US, Uruguay, France, the UK, Italy, Spain, Denmark, and Sweden.

If we give this a moment’s thought it’s not particularly surprising. Co-op workers are likely to have significantly more motivation to work hard because they are co-owners, so unlike in a capitalist firm where the harder I work the more the boss makes, in a co-op workers have enhanced motivation because they receive a portion of the profits. In addition, co-ops are likely to have smoother coordination in their operation because the workers are likely to feel more trust and less alienation, and so there tend to be less sick days, and, importantly, less need to hire many expensive managers to constantly monitor and supervise every little thing.

One of the major advantages of worker co-ops is in terms of wage equality. This is a big issue, since we know that economic inequality is at a higher level today, particularly in the US, than in any other time since the 1920s. Indeed, contemporary American inequality is significantly worse than during the height of the Roman Empire and is even starker than in Russia on the eve of the Revolution. The average American CEO makes 300 times the average worker; the average CEO in continental Europe makes about 15-20 times the average worker; whereas for worker co-ops, the ratio hardly ever surpasses 3 to 1. 

The second major advantage of worker co-ops is that they are far better at dealing with downturns than conventional firms. Whereas managers in conventional, undemocratic firms typically react to recessions by firing workers en masse, a cooperative structure allows workers to make shared sacrifices by collectively agreeing to reduce their hours or pay in a fair and equal manner. Since workers are their own bosses, lay-offs only happen as a very last resort. “Economic rationality with a human face,” as one commentator puts it. This is why during the Basque recession from the mid-1970s to 1984, the region saw the loss of 100,000 jobs and a 20% unemployment rate, yet, remarkably, not a single Mondragon member lost her job (though some temporary non-member workers did). While Mondragon is unlikely to escape the current Spanish depression unscathed, the latest data suggests that, once again, it will be responsible for far fewer layoffs than its competitors.

Public Banks

Public ownership of banks has been a common feature of many economies for many years. In 1970, 59% of the equity of the 10 largest banks in an average country was owned by the government, and still in 1995, 42% was state-owned. The most important rationale for public banks over private ones is that they can serve a social purpose broader than narrow profit maximization. Since public banks are not dependent on making money, they can provide financing to poor people and poor communities, they can invest in green businesses, they can help finance any number of socially desirable (but unprofitable) activities, from public transit, to art and culture, to volunteering and social justice activities.

For example, one of the most serious failures of the private banking sector is the number of poor communities left without adequate financing. In the United Kingdom, for example, 26% of people from the poorest quintile of society have been refused credit; many are thus forced to rely on the subprime credit market where annual percentage interest rates typically range from 100 to 400%.

Finance is so crucial to the day-to-day functioning of our economy that it is really a public utility—like a post office, water system, or an electricity grid. Society is utterly dependent on it. If banks and stock markets stop providing finance, businesses go bankrupt, people lose their jobs, then their livelihoods.

One important example of public banks is found in India. In 1969, then further in 1980, the Indian government nationalized the bulk of its banking system. The rationale for nationalization, codified in the 1968 Bank Nationalization Act, was that

an institution such as the banking system which touches and should touch the lives of millions has to be inspired by a larger social purpose and has to subserve national priorities and objectives such as rapid growth in agriculture, small industry and exports, raising of employment levels, encouragement of new entrepreneurs and the development of the backward areas. For this purpose it is necessary for the Government to take direct responsibility for extension and diversification of the banking services and for the working of a substantial part of the banking system.

The banks were required to open branches in rural areas and to provide a portion of their credit to poor and marginalized people. Now it is clear that there was corruption in the public banks as well as inefficiency (though it’s not clear that public banks suffer from more corruption than private ones). However, it is also clear that the banks were largely successful in their social mission. Indeed, India witnessed the largest rural branch expansion program ever seen: between 1969 and 1990, bank branches were opened in roughly 30,000 rural locations which had no prior formal credit and savings institutions. This expansion of public banking can explain roughly half of the fall in rural poverty between 1961 and 2000. Furthermore, if we compare the period between 1977 and 1990, when the banks were public, to the subsequent period after the partial privatizations, we see that rural bank expansion and poverty reduction were significantly greater in the public banking era than in the private one (since the private banks have been much less interested in operating in less profitable rural areas). The Indian example makes it crystal clear that public banks can serve a social purpose far more effectively than their private counterparts. 

Participatory Budgeting

Most countries today have “public” investment that is largely dislocated from the actual public – a vote every four years for a state with millions of people in it is an extremely narrow avenue for citizens to express their investment preferences. The local level is the area where the least public investment is presently done, yet it is where the most democratic potential lies.

Instead of public investment always happening at the highest levels of the state, furthest away from grassroots influence, imagine if the state were to devolve substantial funds to the cities or to neighbourhood assemblies to democratically allocate investment. That way local people could engage in a meaningful way, deliberate about their investment priorities and make decisions on an equal one-person one-vote basis. An important real-life model for this is participatory budgeting. The most famous example of which is from Porto Alegre, Brazil, where the state devolves tens of millions of dollars every year for the citizens themselves to decide to spend in a participatory fashion. The process started in 1989 and then spread to over one hundred municipalities across Brazil and has now spread to 1,200 cities across the world from Canada to India. Residents in Porto Alegre meet in neighbourhood assemblies to deliberate on spending priorities and elect delegates to implement these priorities. In many ways participatory budgeting has been a great success: there has been a flourishing of participation in local investment decisions with thousands of people participating every year, mostly through local neighbourhood meetings to set investment priorities. Especially important is the fact that the process is dominated by poor and working people – a previously marginalized segment of society. 

There is widespread agreement that PB has brought significant positive changes to Porto Alegre. From 1996 to 2003, nearly US$400 million of new investment projects were implemented through PB; the projects ranged in size from small drainage systems and street paving to complex housing projects. It is important to note that the type of investment that has occurred is markedly different under PB than earlier eras. In terms of basic sanitation, for instance, in 1989, only 49% of the population was covered. By the end of 1996, 98% had water and 85% had sewage. De Sousa Santos reports that while all previous administrations combined had built 1,100 km of sewers, under PB, 900 km were built. Other common investment projects include roads, houses, and schools. Between 1989 and 1996, the number of students in school doubled and the number of schools quadrupled. Even the democratically recalcitrant IMF admitted that “the process of participatory budgeting has brought substantial changes in Porto Alegre”. 

Economic Democracy – A Systemic Alternative

Economic democracy is not simply a series of piecemeal reforms; it is also a vision of a fundamentally different kind of society. Imagine a society with full and robust economic democracy based on the following four pillars: the majority of workplaces are worker cooperatives; workers and consumers interact in a highly regulated and redistributive market; finance is provided by public banks; and public investment occurs partially at high level for major projects, but significantly through lower levels via participatory investment.

How would the nuts and bolts of such a system function? People would apply for jobs in the normal way. Co-ops would try to make money in the market, just as firms do today. The co-ops would be free to pay their workers equal wages or not (though previous experience with co-ops indicates that wage differentials will not usually exceed 3:1). Co-ops looking to expand would apply for loans from their local public bank. Businesses that are innovative and successful at responding to the demand of the population would grow and prosper. So successful firms would make more money than their competitors, thus providing incentives to work hard. High levels of taxation would prevent the rich from becoming super-rich, and would also pay for excellent public services, perhaps a Guaranteed Basic Income. Firms that are producing things that no one wants would go out of business; their workers would need to find new jobs (but note that unlike today, this would not at all be a tragedy since the public services or basic income provide very strong social support). Moreover, community members would be able to direct the economic development of their neighbourhoods through their participatory budgeting system as well as the public banks. Such a system would retains price signals for efficient allocation, a certain degree of material incentives for hard work, but no devastating consequences for business failure. There would still be business competition, which is useful for keeping firms accountable to what the population wants, but in this competition, no one wins majestically and no one loses tragically (no one ever becomes rich enough to acquire power over others or poor enough to go hungry, or lose their healthcare). The democratic market here resembles more a friendly sports race than a life-or-death battle. 

A true economic democracy would possess all the efficiencies of the market system without the profound injustices and disenfranchisement. There would be far more freedom – workers have enhanced say in their workplaces, citizens would have enhanced say about the economic development of their communities. There would be far more equality – due to the compressed pay scales of the co-ops and the higher taxes. Democracy too would have finally breached the barriers of the political system within which it has previously been confined, and would thereby come to animate all the main institutions of society. Such a society would be neither capitalist nor communist. It would be a radically democratic society. Clearly it would not be a perfect society, but just as clearly, it would be a profound advance from where we are now. 

(All facts and statistics are drawn from the author’s book, After Occupy: Economic Democracy for the 21st Century, available here.)

Gar Alperovitz on Why the New Economy Movement Needs to Think Big

from Yes Magazine

His new book, "What Then Must We Do?" imagines how a new economic system might actually emerge, from the bottom up, in the next few decades.                      

Photo by Walter Corno / Flickr

It’s possible that the future of the American economy arrived 37 years ago, on a drizzly, gray day in Youngstown, Ohio. That morning,     in 1977, residents woke to the news that Youngstown Sheet and Tube, a large steel mill and major provider of good, well-paying jobs in the area, was to     shut its doors, putting five thousand people out of work. It was the first among a series of blows to the city, which would eventually lose half its     population and sink into Rust Belt decrepitude.

But something else happened in the wake of the day that became known around town as Black Monday: The newly-unemployed steel workers got together and, with     the support of their community, built a coalition to purchase the mill and run it themselves as a worker-owned cooperative. Today, some four decades later,     the notion of worker-ownership has taken hold in Ohio, a state with many worker-owned businesses and a support system for building them that’s among the     best in the nation.

 

The story of Youngstown figures prominently in political economist and historian Gar Alperovitz’s important new book, What Then Must We Do?: Straight Talk     About the Next American Revolution, because, in not a few ways, what happened to Youngstown is what’s happened nearly everywhere. Cities and towns from     formerly big Detroit, Mich., to tinier-than-ever Chadbourn, N.C., have watched jobs, resources, and populations dwindle, while the country’s larger-order     economic and ecological systems begin to fail as well.

New economy proponents shouldn’t settle for small and local; a truly serious attempt at a new economic system will require building institutions at the regional and national scales, too.

So what’s going on in the richest country in the world? According to Alperovitz, the great emptying out of American communities is symptomatic of something     deeper, which is the ever-increasing flow of wealth to multinational corporations. In 2014, wealth amounts to decision-making power, and Americans have     watched that power move from the hands of localities to the hands of multinationals—almost none of which are rooted where they operate, and almost all of     which have priorities other than community stability.

Having diagnosed our situation as a systemic crisis, what, then, does Alperovitz recommend? As it turns out, the 1977 Youngstown coalition could provide     the seed of an answer. In chapters packed with historical anecdotes and current-day examples, What Then Must We Do? shows how the steel workers’ collective     response to collapse is a model for economic self-determination that is spreading and deepening across the country. In Cleveland’s struggling Glenville     neighborhood, for example, there exists a complex of worker-owned cooperatives that sell goods and services to local hospitals—an arrangement that’s     providing good jobs that won’t leave the area. Similar complexes are emerging elsewhere in the United States, from Pittsburgh to the Bronx. And all of this     in addition to the 130 million Americans who are already members of co-ops and credit unions, the latter representing a block of capital (roughly $1     trillion) as big as one of the top five Wall Street banks.

What Then Must We Do? Straight Talk About the Next American Revolution Gar Alperovitz Chelsea Green

 

Readers of Alperovitz’s previous book, America Beyond Capitalism, are likely to recognize an argument about how corporate power warps democratic politics     and how things like cooperatives and community land trusts offer an alternative. But What Then Must We Do? presses further, and attempts to imagine how a     new economic system built from a diversity of cooperative organizations might actually emerge, from the bottom up, in the next few decades. If that’s to     happen, Alperovitz argues, new economy proponents shouldn’t settle for small and local; a truly serious attempt at a new economic system will require     building institutions at the regional and national scales, too.

“New forms of ownership are important not only on their own,” Alperovitz writes, “but also in that they begin to offer handholds on a new longer-term     vision.” To get there, he describes a strategy for slowly turning privately owned blocks of wealth into democratically owned blocks of wealth—in contexts     that range from the health care and banking sectors to transportation infrastructure. “We are talking here about developing institutions, not just trying     to change policy,” Alperovitz stresses. “And the institutions we are talking about are directly concerned with the critical system question of who owns     (and how to democratize) productive wealth.”

It’s hard to wade into these topics without tangling with some complicated ideas—I had to look up a few words in the dictionary—but Alperovitz does an     admirable job of translating the academese. In each chapter, he provides concrete ideas about what a system might look like that isn’t capitalism and isn’t     state socialism, while describing a path forward that feels robust, practical, and even a little exciting. Should we manage to head down that path, we may     find proof that, in Alperovitz’s words, “if you roll up your sleeves, it may well be possible to do something different.”

---

Scott Gast wrote this article for The Power of Story, the Summer 2014 issue of YES! Magazine. Scott is assistant editor of Orion magazine. He lives in western Massachusetts.

Read more:

• Worker-Owned Co-ops Get $1 Million in NYC Spending
• A Local Economy Solution to Africa's Poaching Problem
• "Black Women’s Blueprint" Helps Low-Income Women Get By—Through Bartering

After Occupy: Is Economic Democracy Possible?

By contributors | May. 19, 2014 | from juancole.com

(A conversation on economic democracy with Tom Malleson via OUP)

How do we address the problem of inequality in capitalist societies? Tom Malleson, the author of After Occupy: Economic Democracy for the 21st Century, argues that by making sure that democracy exists in both our economy and in our government, we may be able to achieve meaningful equality throughout society. We [OUPBlog] recently spoke to him about how economic democracy works and how viable it can be.

To start, give us a bare-bones description of what economic democracy is.

Economic democracy is the idea that democracy belongs not just in politics, but in the economy as well. There’s a paradox at the very center of our society: we call ourselves a democracy and yet a central part of society, the economy, has very little democracy in it at all. Workers do not elect the managers of their firms. Bankers do not allocate finance with any accountability to their communities. Investment decisions are not made with any citizen participation. That’s the philosophical paradox that After Occupy investigates. There are real, concrete examples of democratic alternatives in the economy out there, such as worker cooperatives in Spain and Italy, public banks in India, participatory budgeting in Brazil, capital controls in Malaysia, and so on. Ultimately, these alternative practices might be woven together to constitute a fundamentally different kind of society – a truly democratic one.

What exactly is a worker cooperative?

Worker co-ops are businesses that are owned and controlled entirely by the workers themselves. Workers elect the management on a one-person one-vote basis, just like we elect politicians into government. Probably the most famous co-op in the world is Mondragon in Spain. It started in 1956 with only five workers, and today employs over 80,000 people, with assets of over €35 billion. In addition to being far more democratic than conventional corporations, co-ops have two other important advantages. First, they have far less inequality of wages. In the United States, the average CEO makes 300 times the average employee of his or her company. For co-ops the ratio rarely exceeds 3:1. If co-ops spread, society as a whole would become significantly more equal too. In addition, co-ops also have far better job security. Instead of simply firing people in a recession, co-ops act in a much more humane way, usually by collectively agreeing to reduce their hours or take a pay cut across the board, instead of laying people off. That’s why in this last recession Mondragon has fired far fewer people than other Spanish firms. So if we had more co-ops here in the United States, the recession would have been far less devastating.

Are co-ops economically viable?

Absolutely. Economists have now been studying co-ops for over 30 years, and the conclusion is that worker co-ops operate with similar levels of efficiency to conventional firms. These results have been found again and again, in the United States, Uruguay, France, Italy, Spain, Denmark, the United Kingdom, and Sweden. Perhaps the most compelling evidence of viability is Northern Italy, where co-ops are more prevalent than in any other part of the world. In Emilia Romagna, for instance, they represent a substantial 12% of the region’s GDP, many co-ops have been around for decades, and the co-op sector dominates in a number of industries including construction, wine making, and food processing.

In After Occupy you argue that the current system of investment is undemocratic. What exactly do you mean?

The investment decisions that are made today — building highways or high-speed trains, condos or social housing, tar sands or green businesses — fundamentally determine the kind of society we will end up with tomorrow. Investment determines our future, which is why it must be accountable to us, the public. How could this happen? One important example is participatory budgeting, where local neighborhoods get to decide themselves on the kind of public infrastructure spending they want to see. In terms of finance, bank regulation is an obviously important first step. But over the long term, what is needed is a public banking system so that finances are allocated according to public need, not just according to private profit. Just like we have an electricity system and a post office that serves public needs, we need finance to do so as well (so that banks invest in poor communities or into green businesses – things that private banks will never do). At the end of the day, finance is simply too important for our future to be left to the banks.

Is having a true economic democracy feasible or is it simply a utopian?

Every proposal that is made in this book is based on real concrete examples. Worker co-ops already exist, as do public banks, participatory budgeting, etc. So we know there is absolutely nothing impossible about any of them – the institutions work. The difficult part, of course, is expanding them and bringing successful examples over from other countries. Some reforms (such as regulating the banks), are possible in the short-term; others, like building a large co-op movement, are the project of a generation. But the fact that we can see real-world examples of these things means that they are not at all utopian. With sufficient political will, a democratic economy is entirely within our reach.

Tom Malleson is the author of After Occupy: Economic Democracy for the 21st Century and is an Assistant Professor in the Social Justice and Peace Studies program at King’s University College at Western University, Canada. He is the co-editor of Whose Streets? The Toronto G20 and the Challenges of Summit Protest and the author of Stand Up Against Capitalism (forthcoming).

Mirrored from Oxford University Press Blog

Creating The World We Want

from thepeoplesvoice.org

February 22nd, 2014

By Kevin Zeese and Margaret Flowers

In addition to knowing what we oppose, we are building the world we want to see

February marks the third anniversary of the 2011 revolt in Wisconsin, the occupation of the state capital and mass protests against the attack on workers. Wisconsin was the largest of the protests at that time, but across the United States there were a series of protests against foreclosures, austerity and the unjust economy.

The Wisconsin uprising, along with the Arab Spring and Indignado movement in Europe, inspired Occupy, a revolt that began on Wall Street and spread across the nation. It was a revolt against an economic system – big finance capitalism – that is causing a corrupt and unfair economy; as well as against a government that serves the interests of the wealthiest before meeting the necessities of the people.

People often want to know what the movement for social and economic justice wants. Occupy Wall Street issued its Declaration of the Occupation of New York City which laid out a series of grievances. But, in addition to knowing what we oppose, we need to define what we stand for. If we do not like big finance capitalism, what will take the place of the current economy?

During the organizing of the occupation in Washington, DC on Freedom Plaza we developed a list of 15 core crisis issues that the country is facing and we outlined solutions to them. These solutions are supported by super-majorities of Americans who, polls show, could rule better than the elites.

At the core of these solutions is the desire to put in place an economic democracy agenda, building institutions that are controlled by and benefit communities while also protecting the planet. By building wealth in a way that is more equitable and democratic, the rule of money is weakened. A democratized economy shifts political power away from concentrated capital to the public and further empowers people by meeting their basic needs for shelter , food, education, healthcare and income.

In many respects we are in a conflict with big finance capitalism and seeking to birth a new economy that serves the people. How do we get there? In her book, Getting Past Capitalism: History, Vision, Hope, Cynthia Kaufman suggests we are in a variety of struggles and rather than seeking total replacement, we need to build healthy institutions while challenging those unhealthy ones we can defeat. Gar Alperovitz defines the transition as ‘evolutionary reconstruction’, a way that we gradually build a better world.

Economic Democracy

This week, we re-launched It’s Our Economy, a project dedicated to reporting on and assisting the growing movement for economic democracy. We define economic democracy as:

premised on the idea that people should not cede power to mega-corporations, big finance, or a “professional” political class. The people have the shared knowledge to help build an economy that works to strengthen communities and         build wealth for all, not just a few.We recognize the internal contradictions of big finance capitalism and we have seen the failures of state-based socialism and are seeking to create a new type of economy that is democratized, empowers people to gain control over their economic lives and encourages cooperative solutions that create wealth for ourselves and our communities….

Economic democracy also emphasizes the commonwealth. The commons includes not only roads, land, water and resources but also the knowledge and technology developed, often with public dollars, which has been built up over generations….

Economic democracy stands in contrast with neoliberal economics.Neoliberalism privatizes public goods and seeks to commodify everything possible to create profit-centers while cutting public services in the name of austerity.

One way to understand what makes healthy institutions that serve the people is to use a human rights framework. There are five human rights principles. These include:

Universality: Human rights must be afforded to everyone, without exception.

Equity: Every person is entitled to the same access to services and public goods.

Accountability: Mechanisms must exist to enforce the protection of human rights.

Transparency: Government institutions must be open and provide the public with information on the decision-making processes.

Participation: People need to be empowered to participate in the decision-making process.

The need for a new economy based on the goal of benefitting all people, not just the wealthiest, has become more urgent as the impact of the economic collapse and its false recovery are felt. These include high rates of Americans dropping out of the labor force, the wealth divide expanding, record poverty and lowered incomes for most people.

People Are Creating the New Economy in Many Ways

Political and economic leadership continues to go in the opposite direction of what people want: cutting the social safety net and doing little to invest in re-building the economy while the costs of energy, food, healthcare and other necessities rise. People across the country are acting on their own to build an economy that will serve them.

The building of the new economy, sometimes called a ‘solidarity economy,’ has been developing for many years, particularly in other areas of the world such as Latin America. As a result we can now see reports of its success. A fundamental belief of economic democracy is to build from the bottom up, starting with local communities. A report this week from the Institute for Self Reliance found that communities with buy local programs have seen local businesses grow three times as fast as communities without such programs and businesses report a 75% increase in customer traffic.

One key aspect of buying local is our food supply. The International Forum on Globalisation reports that “the average plate of food eaten in western industrial food-importing nations is likely to have traveled 2,000 miles from source to plate.” Around the country people are working to change that. Two programs that were in movement news this week were “Our Harvest” and “CropMobster.”

Our Harvest comes out of a 2009 agreement between the United Steelworkers and the Mondragon Co-op to create union co-ops. Our Harvest is a produce farm and food hub for aggregation and food processing. The goal is to re-create this model around the country to provide local foods and good jobs in union co-operatives.

CropMobster is a project from Petaluma, CA that seeks to redistribute food to reduce waste and to provide healthy food while growing a shared economy. CropMobster isaninstant-alert service linking communities-in-need with local farmers, producers and food purveyors who have excess food to sell or donate. In one year it has spread to the greater SF Bay Area, with a dozen counties participating. Already, more than 300,000 pounds of food has been saved and over 1 million servings eaten; more than 4,000 participants and hundreds of farmers and small food businesses are joining with CropMobster.

Another issue that has been in the news lately because of multiple environmental disasters is the quality of drinking water. The chemical spill in West Virginia, coal slurry spills, hydrofracking and pipelines bursting in multiple states have been a few examples of how fresh water is now at risk. In addition, the extraction of fossil fuels and uranium are consuming tremendous amounts of water even in areas that are facing droughts. Water will be an item on the political agenda at the state and national level. This week in Europe, 1.66 million people were able to put the issues of the right to clean water and stopping water privatization before the European Parliament.

At the center of so many issues – the environment, climate, water, air, jobs – is energy. President Obama and the bi-partisans in Congress continue to push a disastrous “all of the above” energy strategy that is leading to extreme energy extraction with terrible environmental consequences. The corporate duopoly seems unable to challenge big oil, gas, coal and nuclear to put in place the carbon-free, nuclear-free energy economy that is needed.

In the absence of national leadership, people are moving forward. Over 80 landowners have dedicated nearly 20,000 acres to what will become the largest wind farm in South Dakota that will increase the wind energy output in the state by 50%. As solar rapidly grows in the United States, research is now showing that more people will be employed by solar than by oil and coal combined.

Big changes are also on the horizon in the labor front. There are widespread battles for raising the minimum wage to a living wage, and while many companies treat their employees as if they were disposable, in other workplaces employees are becoming owners so they can share in the wealth created by their labor. There is a growing movement for worker-owned cooperatives with national meetings in the United States and in Europe.

An example that was in the news this week was WinCo, a growing competitor to Walmart. WinCo is now operating 93 employee-owned stores in seven states with nearly 15,000 employees. The company has lower prices than Walmart and provides employees with a health plan that includes dental and vision as well as an Employee Stock Ownership Plan for their pension.

Other businesses are creating a more just world by redefining corporate charters so that one of their purposes is to provide public benefits rather than profits to investors. In the past few years, 20 states, including the District of Columbia, have enacted legislation that allows companies to register as benefit corporations and16 more statesare considering it. Delaware, the home of half of US corporations and two-thirds of Fortune 500 companies, enacted a B Corp. law. This status protects corporations from lawsuits by shareholders for not maximizing profit, and it even gives shareholders the right to sue the corporation for failing to optimize its social mission.

We are Creating a Renaissance

The examples above just give a taste of all of the changes that are taking place to create new systems that replace the old failing ones. For more ideas, visit the “Create” section of PopularResistance.org or ItsOurEconomy.us.

What is amazing is that around the world, the same ideas and values are being put forward. People are joining together to create societies that respect life and the planet and that are more horizontal and just. We are truly in a time of transformation which is made more urgent by the many crises we face.

There has been talk of global revolution, and in some areas, revolution - the changing of governments - is occurring. But we are not yet in a global revolution. In his article, “Revolution, or Digital-Age Renaissance,” Bernardo Gutierrez writes, “Ruskoff argues that the revolution has not arrived and what we are experiencing is anew renaissance. ‘Renaissances are historical instances of widespread recontextualisation. It is the rebirth of old ideas in a new context. Renaissance is a dimensional leap, when our perspective shifts so dramatically that our understanding of the oldest, most fundamental elements of existence changes. The stories we have been using no longer work.’” Gutierrez explains that revolutions come after the renaissance.

Currently people are not only creating new systems, but they are questioning the stories that have been told to maintain the status quo and are recognizing that many of our restraints are artificial. People do have the ability to rethink the premises upon which we base our assumptions and to change their views and behaviors.

For decades we have been taught to believe in capitalism and neo-liberalism. We have been told that there will always be poor people and we must accept that. We’ve been told that wealth trickles down and that we should all compete to achieve the “American Dream.” We’ve thought that in order to achieve that dream we must go into debt. And we’ve believed that the people in power should be trusted to make decisions for us, that we didn’t have the capacity to make them.

All of that is changing and being turned in its head. Awareness is growing that we can do things differently. People are actively confronting the old ways through both resistance and the creation of new approaches or the re-emergence of older methods. One area is the recognition that there are alternatives to debt-based economies. This is not a new idea. There were debt jubilees in ancient history.

In the article, “Debt Refusal Essential To Rebuilding Popular Democracy,” the editor writes that “resisting debt is not only moral, it may be essential to re-envisioning a democracy built on legitimate bonds to our community.” StrikeDebt, which was organized out of Occupy Wall Street, teaches us that “working together to build greater economic democracy would mean weaving a dense, creative network where our debts are to each other, not tothem(read: the big banks).”StrikeDebt created a Debt Resister’s Manual and is organizing a nationwide debt resistance movement. Their new manual is due out soon.

Another area of renaissance is globalization. To date, globalization has been based on the neoliberal economic model that leaves poverty and environmental destruction in its wake. But now that we understand these consequences , it is becoming more difficult for governments to continue on this path. A case in point is the current Trans-Pacific Partnership which was negotiated for years in secret and the plan was to pass it quietly through Congress using Fast Track. That effort has stalled for now and instead civil society groups are working together to redefine what global trade should look like and how it should be governed.

There is a call for ‘deglobalization’ which does not oppose global trade but refers to orienting trade so our communities can build local economies, to produce goods that are needed and to become more self-reliant. A detailed plan for this is outlined in the blog on systemic alternatives. They write that deglobalization is not about withdrawing from the world economy but is about restructuring it: “Today’s need is not another centralized global institution but the deconcentration and decentralization of institutional power and the creation of a pluralistic system of state and non-state institutions and organizations interacting with one another, guided by broad and flexible agreements and understandings, which receive their authority and legitimacy from below.”

We have an opportunity right now while trade deals are stalled to redefine global governance. Collectively, the people can confront the dominant paradigms and global power structure and rebirth a world grounded in the principles of human rights and protection of the planet. Resistance is not only protest, but includes acts of creation. When you get involved in your community to build democratized economies, you are part of the global transformation.

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This article is produced byPopularResistance.orgin conjunction with AlterNet. It is based onPopularResistance.org’s weekly newsletter reviewing the activities of the resistance movement.

Kevin Zeese, JD and Margaret Flowers, MD are participants in PopularResistance.org; they  co-directIt’s Our Economy and co-host Clearing the FOG. Their twitters are@KBZeese and MFlowers8.

@KBZeese Shift Wealth:Economic Democracy Its Our Economy (www.ItsOurEconomy.US) Build power and resistance Popular Resistance (www.PopularResistance.org) Democratize the Media Clearing the FOG (Forces of Greed) Radio (http://www.ClearingTheFOGRadio.org) Video (http://www.ustream.tv/itsoureconomy)

Capitalism is the Problem, Economic Democracy the Solution

by Gary Engler / January 31st, 2014

from Dissident Voice

(A speech given at the One World Week Forum at the University of Warwick on January 30, 2014 on the topic of Capitalism and Sustainability: Can We Have It All?)

Can capitalism solve the problems of global warming and growing inequality?

It seems to me this is like discussing the issue of inappropriate hypersexual imagery bombarding 11-year olds and then asking: Can Justin Bieber or Lady Gaga fix the problem?

Real capitalism, not the theoretical version taught in school, is a system of minority rule in which a few people profit at the expense of others.

Real capitalists are always trying to cut their costs and increase their profits, which leads to unemployment, falling wages, rising economic disparity and not paying for the environmental damage they cause.

Private ownership of what are social means of livelihood produces incentives for capitalists to pass along the real costs of industry to communities, workers, future generations and other species.

Private ownership makes growing inequality inevitable. A system can proclaim itself democratic, but if a minority holds most of the economic, and therefore social and political power, that minority will inevitably reward itself, its power will grow and ever-expanding inequality will be the result.

Capitalism is sociopathic. Its ideologues, like the late Margaret Thatcher, reject the social, claiming only individuals exist. Yet capitalism has driven individual producers to the fringes of economies. Most people, 90 per cent in the U.K., depend on wages or salary, working with others in cooperative, coordinated labour — social labour, but directed by wealthy minorities for their own profit.

Capitalism promotes greed. It boasts of this. So why would we be surprised when a small minority with most of the power looks after itself, in effect telling the rest of us: “Screw you and the planet you live on! We don’t care about global warming because we have the money to buy a nice place regardless of how high the oceans rise.”

Capitalism requires constant growth to satisfy its need for more profit. But what happens when the environment needs a smaller human footprint? When, at least in wealthier countries, we must learn to live with less stuff?

History shows capitalism reacts badly to declining markets. When the economy shrinks for a sustained period the system goes into crisis. Banks crash, unemployment grows and capitalists often turn to war to get their profits rising again.

The truth is a sustainable economy is incompatible with a system that constantly demands more profit.

To quote the greatest living English political philosopher, Russell Brand: “I know what the fucking system shouldn’t do. It shouldn’t destroy the planet and shouldn’t create massive economic disparity.”

Like Russell we know what we don’t like. That’s the easy part. But how can we get rid of capitalism and what is the alternative?

To answer we must go back to the issue of power and how to distribute it in a way that promotes the common good, a key element of which is a healthy environment. The best way is through more democracy. REAL democracy. Economic democracy.

Do you want an equitable, sustainable economy? Then help overthrow capitalism and create an economic democracy.

What exactly does this mean?

Let me give you an example: With the one pound one vote system that governs corporate capitalism, Richard Branson, with a net worth of 3.5 billion pounds get 3.5 billion votes. In comparison you get 147 and you get 58. Most of you poor buggers owe more than you own so you get no votes at all. Economic democracy means giving everyone the right to a voice and an equal vote in their communities’ economic decisions. When everyone has an equal right in decision-making, economies will be motivated by general wellbeing, not private profit. Economic democracy means eliminating the divide between workers and owners by making everyone an owner. Economic democracy means multiple owning communities  — local, regional, national, international — so that power does not become concentrated in the hands of a single central state. It means that wherever social labour occurs a system of democracy manages the enterprise.

Imagine companies that are democratically run by workers together with a local, regional, national or international government, whichever is appropriate to that enterprise; companies whose mandate it is to promote the common good, rather than the narrow self-interest of rich shareholders; companies that no longer have incentives to destroy the planet, but rather face real penalties for harming the environment.

Now, I know what at least some of you are thinking. This is not realistic. Your ideas are just pie in the sky. But the truth is capitalism has already created what one might call “objective conditions” that do indeed make economic democracy possible. Most people in most countries already depend on social labor. Most of you, if you find paid employment, will be salaried or wage workers. If we choose to fight for it, we can expand one-person, one-vote decision-making into every area where people work collectively, which is most of our economy. If we elect governments committed to it, we could pass laws that limit private property to what is truly private and doesn’t give an individual power over others. We could create a system of social ownership with multiple democratic owning communities.

If we accomplish these three things — replacing corporate ownership with social ownership, replacing capitalist entitlement with equal human entitlement and replacing master-servant relations with workplace democracy — the system that drives enterprises to maximize profits, regardless of the consequences, would no longer exist.

Capitalism and sustainability, can you have it all? No. But there is a much better alternative: Economic democracy, a system that will offer authentic jobs, a nourishing work-life balance, your fair share of power and a healthy environment. This sounds like the essentials of a good life to me.

Gary Engler is an elected union officer and co-author of the just released New Commune-ist Manifesto — Workers of the World It Really is Time to Unite, an updating of the original designed to provoke discussion about the future of unions and the Left. Read other articles by Gary.

This article was posted on Friday, January 31st, 2014 at 7:01am and is filed under Capitalism, Democracy, Economy/Economics, Environment.

To Achieve Economic Democracy- Revolt Is What We Must

OpEdNews Op Eds 8/22/2013 at 02:02:26

By Sam Amer (about the author) from OpEdNews

We have lived in Santa Barbara California for more than 25 years. We saw and felt the enormous social and economic changes that happened in this town and its environs during that period. I just returned from walking up and down State Street, which is the main drag here. What I just saw and felt is what prompted me to write this essay.

Many of the stores we loved in Santa Barbara are no longer there. Those that remain have reduced their stocks significantly, particularly in luxury items. We see "for rent' or "for lease' signs hanging over many storefronts. Scores of beggars are lining the street. Several accosted me asking for small change. These were not the familiar older winos with unkempt beards who are looking for money just to buy more beer, these were younger people and looking for work. Some even asked me if I knew where they might for apply for jobs. These people are desperate and hopeless. Their plight is heart-wrenching.

Clearly, the economy has deteriorated in Santa Barbara. Many other small towns all across America are experiencing a similar state. Yet, the stock market is at its peak and corporate profits are the highest since the 50's. Our economy is also, supposedly, experiencing a turnaround. But where is it happening? I saw few signs of that on State Street. This town, and many others like it, is in economic trouble. The United States maybe the world's greatest economic power, but it is clearly not doing well by its people.

Something is really wrong here. How can we have corporate profits at a 50-year high and at the same time a 50-year high rate of unemployment? How can that be? The corporations are clearly making great profits while employing fewer and fewer people. Anyhow, they clearly are not employing many Americans. The encouraging economic numbers are clearly disguising deep problems.

From the available economic data, it is also clear that the people at the top of the economic pyramid are doing very well while the rest of us are still in an economic recession. The share of income for the richest 1 percent has tripled since 1980 while the income of the rest remained stagnant; real wages in the US stopped growing in the 1970s. The economic pie has clearly shifted with the biggest slice going to the very rich. In short, the rich have sucked the country dry, leaving little crumbs for the rest of us. It also appears that the rich are not interested in solving our problems or employing more Americans; they are mainly interested in renting their money where they can get the most for it.

All you get from the news media these days are great speeches, including a recent one by President Obama, celebrating our economic recovery and how many new jobs are being created. But most of these are part-time jobs not enough to pay the family bills. Often, you also hear concerns about the disappearing middle class. The so-called economic recovery appears to be mostly due to the rise in the stock and bond markets; you don't see it anywhere else. It does not reflect rises in consumer purchasing power or increases in retail sales.

 The stock market is reaching record levels but bulk of the American public is not feeling any relief. The stock market is increasingly driven by the banking industry. The real economy is wracked by consumer fears, falling wages, joblessness, and low-level jobs for a growing number of people who ar e lucky enough to be working. The stock market figures are clearly reflecting the financial status of the wealthy. Most Americans are barely paying their bills and have had to significantly "downsize" their lifestyles.

Unbelievably, many commentators and talking heads are discussing, at length, whether President Obama should appoint a man or a woman to head the Federal Reserve. Such talk is really disgusting. It shows callousness on the part of our leadership towards the needs of the American people. In reality, who gives a care about the sex of the Federal Reserve chairperson or even what that institution does? Clearly, it is not helping the bulk of the American people.

The country's leaders are mainly interested in helping the banks and other large financial institutions. They don't care much about the rest of us. The recovery on Wall Street bears little relationship to what is happening on Main Street. The "human" economy, the one where people live and work and buy products, is suffering even as Wall Street and the stock market boom. The honchos at the top need to come down from their ivory towers and walk the streets and see and feel how the people are actually living. They should talk to real people and not only the rich who don't know, or even care to know, what needs to be done to help the bulk of the American public. They spend their time worrying about haughty international adventures and problems elsewhere. They need to concentrate on what is happening right here in America.

The bulk of American people are stuck in a permanent recession with no way out. Many people are suffering. They are, in many ways, the victims of our lopsided economy.  The upward mobility that made us the envy of the world, and always gave us our hope, is now history. If you are born poor, the chances are that you will remain poor and your children will have no better lives than the one you got.

Meanwhile, Corporations are making record profits. Their main interest is to take advantage of the situation. They have little social conscience. They strive to fleece the public of what money they have left in any way possible. This applies to most sectors of the economy ranging from health care to education to manufacturing. Every time I visit a doctor's office, a clinic or a hospital for example, I feel that I am entering a den of thieves looking for ways to stiff me more and more. Most of what they do is to find ways to exact more money, mostly as unneeded tests, expensive procedures, hospital stays and massive overcharges. The main purpose of these organizations is not your health but their profit.

Our representatives in Congress are failing to represent the needs of the majority. Instead, they mostly represent the interests of those who, through the legal bribes called campaign contributions, ensure their re-election. Being elected to Congress is no longer about public service. It is about enjoying a cushy job (with good health insurance) and joining the class of the rich and famous. It is about having the connections to help your children and those of your friends and associates get better jobs. The rest of us have no one to care for our needs. We are the forgotten majority.

It cannot continue this way. Something must be done. I'm afraid we can't vote our way out of this situation. We really need a revolution to redress the balance and address the needs of the silent majority. We have to force the changes we need. We need to get together, be tough and demonstrate relentlessly for more economic democracy. Masses of Americans need to March on Washington, occupy government buildings and force the passage of the necessary changes in the laws that govern our country. Interestingly, our demands will not differ significantly from those made in the March on Washington fifty years ago where Martin Luther King gave his famous "I have a dream' speech.

We desperately need to equalize our economy. The rich, and very rich, are just a tiny minority. We have the numbers to outvote them. The majority should rule. At a minimum, we should be able to agree on and force changes in the system along the following lines:

1. The government should financially support those earning less than poverty level incomes to bring them up to that level.

2. Any income, from any source, above that level would be taxed at a progressive tax rate the exact level of which would be determined in accordance with the prevailing budget needs.

3. Corporate income would be treated the same way.

4. An inheritance tax of 80-90% should be instituted depending on the size of the inherited fortune.

5. Institute a single payer health care system.

6. Completely remove the influence of money from politics. Advertising and other expenditures by candidates running for office should be controlled and paid for only by the government.

7. Supreme Court Judges should be directly elected rather than appointed by the usually a politically motivated president.

8. Significantly reduce our expensive international entanglements and concentrate our efforts on our own people's welfare.

We need to start a national dialogue and agree on a list of demands. We need to establish a centralized structure to receive and tally those demands. Then, we should demonstrate and march until our demands are met. As we watch the Egyptians struggle to achieve political democracy, we also need a revolution to achieve economic democracy.

As the majority, we should be able to achieve our aims peacefully. This is not going to be easy but it needs to be done for the welfare and better future for all Americans. While the Egyptian revolution is violent and bloody, ours should be carefully peaceful but determined.

Sam Amer is a Retired Pharmacologist with two masters and a Ph.D.            

The views expressed in this article are the sole responsibility of the author   and do not necessarily reflect those of this website or its editors.

Concentrated, Privatized Wealth or Shared Prosperity and Economic Democracy?

by Kevin Zeese and Margaret Flowers, Friday, 26 July 2013 09:34 from truthout           

One of the major conflicts of the era that is not often highlighted for public debate is whether we want an economy that privatizes government services and public resources and continues to concentrate wealth; or whether we want to develop an economic democracy that invests in the public interest and creates shared prosperity.

Journalist Ted Koppel summarized the privatization trend: 

“We are privatizing ourselves into one disaster after another…. We’ve privatized a lot of what our military is doing. We’ve privatized a lot of what our intelligence agencies are doing. We’ve privatized our very prison system in many parts of the country. We’re privatizing the health system within those prisons. And it’s not working well.”

The alternative, also growing rapidly albeit more quietly without corporate media coverage, is economic democracy.  This is based on new models that give people greater control over their economic lives, share wealth in an egalitarian way and allow people to have more influence over the direction of the economy.

Privatization vs. Public Ownership

Privatization versus public ownership of services and resources is one aspect of this debate, but there are also a host of other issues that beg discussion. We will delve into many of these in detail in the Economic Democracy Conference of the Democracy Convention in Madison, WI from August 7 to August 11. Presenters who are deeply involved in their subjects will speak about big picture topics such as what money is, ending debt and creating a new economy to more hands-on topics such as creating socially-responsible businesses, alternative currencies, affordable housing, public banks, saving the post office, local investment, cooperatives and publicly-owned renewable energy. We encourage you to attend the conference (the price is low to make it possible for many to attend) and will provide reports and videos from the conference on It’s Our Economy for those who cannot make it.

The United States is moving on an aggressive, disastrous path of privatization of government services. Some recent examples include the Air Force considering the privatization of Cape Canaveral, NOAA privatizing satellite weather services and schools across the country privatizing education. Everything is on the table to be given over to private industry – airports, roads, health services and water.

Just think how capitalist profiteers’ mouths must be watering at these opportunities.  The taxpayer spends hundreds of billions developing Cape Canaveral and space exploration or weather satellite technology, and then big business buys-in cheap and gets long-term profits.

The bamboozling of the American public from corporate-funded politicians speaking through the corporate mass media is hard to believe. At its root, privatization is about profit for a few at the expense of the many – the workers and people who need the services.  How do they sell this scheme to the public?

One key is self-created money scarcity – which should not even be an issue.  We say that money scarcity should not be an issue because Modern Monetary Theory (MMT) demonstrates that government has the power to create money. This video interview of economist Warren Mosler describes MMT and how countries do not ever face a risk of being unable to pay their debts but can use money in a functional way to meet the economic needs of their country. Money scarcity is a driving force, as a chairman of a major finance company said at a privatization conference, “Desperate government is our best customer. There will be a lot of desperate governments out there.”

An example of how scarce resources are pushing toward privatization is this health clinic in Chicago.  The clinic lost federal funding of a grant that paid for free mammograms for Chicago women. To replace the funding they are seeking to privatize the clinic. Will privatized clinics that seek profit provide these free services? Another is the selling off of post offices across the country.

How do profiteers make money from providing government services? Some keys are job reduction, lower wages and fewer benefits for workers. These are consistently part of privatization, so the process further concentrates wealth at the top and weakens the middle class.  In Louisiana where four LSU hospitals were privatized, thousands of good paying middle class jobs were lost.  Hundreds lost their jobs permanently and those rehired were paid less with reduced benefits.  While an examination of health services has not been reported on yet, profiteering often requires cutting costs that result in lower access to services.

For these reasons, unions should fight privatization wherever they see it. In Washington, DC the union that represents transit workers is fighting plans to privatize bus service in the nation’s capital.  The contract, which includes a new trolley system in DC, would cost $1.5 billion over 30 years. The union warns it would result in 200 bus drivers losing their jobs and less bus routes for passengers. He summarized the reality of privatization of public services:

“We must keep public transportation public,” said Local 689 President Jackie Jeter. “When you start privatizing routes, you lose your say. This is about giving the public their say.”

In fact, as has been seen in the growth of private prisons, governments need to be wary. Cut backs on food and services have led to prison riots in some states. As an editorial in the Toledo Blade noted “Audits in several states, including Ohio, have found that the vendor, the Philadelphia-based catering giant Aramark, has charged for meals not served, changed recipes to use cheaper ingredients, and skimped on portions. A 2001 audit by then-Ohio Auditor Jim Petro found that the state’s prison system paid Aramark for serving nearly 4.5 million meals, instead of the 2.8 million meals it actually delivered, adding more than $2 million to contract costs. On-site visits also found inexcusable sanitation conditions, a lack of training, and “a near riot” at breakfast over Aramark’s strict adherence to portion sizes.” When profit is the goal – workers and services will be reduced to increase profit.

Underfunding of the transportation system is one area that is providing great opportunities for privateers.  For years the American Society of Civil Engineers has been warning that the US infrastructure is crumbling. As Business Week warned in 2007 “[i]nfrastructure is ultra-low-risk because competition is limited by a host of forces that make it difficult to build, say, a rival toll road. With captive customers, the cash flows are virtually guaranteed.” Who is going to build a rival road? Where will the commuters go when tolls rise?

When transportation is privatized, corporations control the transportation infrastructure which is a life blood of the economy. Control is ceded to private equity firms, out-of-state investment banks, global construction companies and the shareholders of these corporations.  The big Wall Street banks – Goldman Sachs, JPMorgan and Citigroup – are major players in roads for profit schemes. Profit becomes the overriding concern, not the needs of the public.

One important example in the news this week was the potential bankruptcy in Detroit.  Many cities face cash shortfalls as cities have been underfunded for decades by state and federal governments and have very little ability to raise money.  In Detroit, the mayor has been replaced by an unelected city manager, Kevyn Orr, and the governor announced the bankruptcy of the city. Many see this as an opportunity for profiteers to buy city property at desperate-sale prices (prices, set by an unelected city manager) – a feeding frenzy for privatizers.

Labor unions, city workers and workers’ pensions will be hit hard. Frank Hammer, a labor organizer in Detroit tells Real News “There have been a lot of conversations under the emergency manager, and certainly now under bankruptcy, about all the city assets that can be put up in a fire sale to help the city, supposedly to help the city pay off their debts. So they’re talking about, for example, selling what’s a very cherished public park in the middle of the Detroit River called the Belle Isle. They’re talking about selling that. They’re talking about selling the art collection that’s housed in the Detroit Institute of Art, which is apparently worth millions, and so that they’re going to just have a feeding frenzy privatizing what previously were understood to be public assets.” Michigan radio reports that everything is on the table, water, sewage treatment, art work, parks – the privatizing profiteers are waiting to see what Orr offers.

Robert Reich points to Detroit as an example of the bankruptcy of America’s social contract.  Racial and economic divides have resulted in many urban areas losing their financial base as wealthy whites moved to the suburbs.  While Detroit is one of the poorest areas of the country, the Detroit Metro area “is among the nation’s top five financial centers, the top four centers of high-technology employment, and the second-biggest source of engineering and architectural talent.”  In Birmingham, Michigan, just across the border from Detroit, $94,000 was the median income last year; and in nearby Bloomfield Hills the median was more than $150,000. In Detroit, 1 out of 3 residents are in poverty, and the median income is $26,000. Writers from New Economic Perspectives point out that the real solution to all the Detroits in the country is for the government to serve as employer of last resort and create a full employment economy.

If government policy treated the Detroit region as all one, there would be no bankruptcy and there would be enough resources to allow the area to take care of itself.  To Reich it is like big banks selling off their bad assets and writing off the loss.  The difference, of course, is that when you talk about a city you are talking about people – hundreds of thousands of people. Detroit exemplifies the wealth divide in America, and the destruction of the social contract that included social services, decent jobs and a more fair economy.

Some Corporate Functions Should Be Made Public Services

In fact, if the goal of the United States was a stronger economy for all, better services and a fair economy, we would be discussing turning some private functions into public services, accountable to the voters.  For example, The Roosevelt Institute reported this week that the United States ranks poorly in Internet services. In the US, the internet is more costly and slower than the rest of the developed world.  Why? Because government has allowed the Internet to be controlled by a series of monopolies like Verizon, Comcast, Time-Warner and AT&T that do not compete with each other. This allows Internet providers to charge whatever they want and provide whatever services they like. Of course, the corporate media is putting out a different message as revealed by two-New York Times OpEds cited in the report by corporate interests that were published in one week.

Roosevelt points out that while Europe and Asia are upgrading, the US has no plans to do so.  Right now, “the U.S. is behind South Korea, the UAE, Hong Kong, Japan, Taiwan, Latvia, Lithuania, Norway, Sweden, Slovakia, Bulgaria, Portugal, Iceland, Denmark, Estonia, Finland, and Norway. Very few Americans have the option to buy fiber to the home connections at reasonable prices.”

Shouldn’t communication, like transportation, be a government service?  It is essential infrastructure for the economy and if it were run as a public service that put the needs of the people and the economy before profit for shareholders, we could create a plan to upgrade and expand Internet with lower costs.

This week showed us another area where privatization and inadequate regulation needs to be reconsidered – big Wall Street financial institutions. Many Americans see the big Wall Street banks as getting away with fraud, racketeering and money laundering and others go further and recognize the obscenities of capitalism.  Bank profits are up in a big way – even though unemployment is stuck at high levels, wages are shrinking and more employees have part-time or temporary jobs. Why? For banks, there is no money scarcity. They have easy funding of low-interest money from the Federal Reserve; and they are protected if their investments go bad by the federal government (i.e. the taxpayers). For example, Simon Johnson reports that JPMorgan has $200 billion in equity but a balance sheet of $2.5 trillion (under US accounting standards) and $4 trillion (under international standards).

This highlights a problem with Modern Monetary Theory as it applies to the US – in the US, the Federal Reserve creates money and provides it to banks at low interest or banks create money through highly leveraged loans.  Real MMT would have the government creating money and using it to fund projects that serve the public interest, e.g. infrastructure, teachers, nurses, social workers, mass transit and greening of the economy – not going into the balance sheets of banks and bonuses and big salaries of their executives.

More people are seeing that the Dodd-Frank financial reforms were insufficient and are calling for more.  Economic writer William Grieder points out “When Barack Obama boasted that his administration had put an end to ‘too big to fail’ banks, it was probably the biggest fib of his presidency. The legislation known as Dodd-Frank did no such thing but its passage effectively closed the subject.” But, now he sees a new season of reform, pointing to a proposal by Democrat Elizabeth Warren, Republican John McCain and Independent Angus King for a 21^st Century Glass-Steagall Act to separate risky investment finance from traditional banking. The proposal would require a five-year transition period for banks to downsize and undo their maze of risky connections to shadow banking.

That is not the only reform proposed. Democrat Sherrod Brown and Republican David Vitter seek to increase capital requirements on the biggest banks up to 15%. While their bill did not get a hearing, the Federal Reserve has increased requirements for the biggest 8 banks to 6%, up from the 3% agreed upon by international regulators, i.e. banks must have $6 to lend $100.

Others are talking about alternative regulations if Dodd-Frank fails, including greater regulation of derivatives, providing greater competition to risky investments through prominent offerings of safe investments, postal banks providing limited consumer financial products and re-making of the regulatory structure to create a single mega-regulator to prevent race-to-the-bottom regulations.

This week, a new scam of Goldman-Sachs was revealed, a scheme which raised aluminum prices costing consumers $5 billion over the last three years.  Goldman bought an aluminum storage company three years ago, since then the average wait time at the storage facility has gone up more than 20-fold, from six weeks to 16 months, resulting in more revenues for storing the aluminum. This means everything that uses aluminum, including the cost of beer, has increased. This was caused by the government loosening regulation so that banks that invest in commodities can also own operations like delivery, storage and inventory. During her final days in office, SEC Chair, Mary Schapiro approved a plan that would allow JPMorgan, Goldman Sachs and BlackRock, a large money management firm, to buy 80 percent of the copper available on the market on behalf of investors and hold it in warehouses. What do you think will be the impact on copper prices? The Fed can end all this if it declines to extend the exemptions that allowed Goldman and Morgan Stanley to make major investments in nonfinancial businesses, but pressure will be needed to make that happen.

Pressure Building From Below

That pressure is building. There are many positive signs. Occupy and its offshoots are taking action to both oppose policies that go against the public interest and to build new systems that protect people and the planet. The newest project is the Occupy Money card that can be used as a debit card without financing the big banks. Another is to stop the transnational corporate power grab, the Trans-Pacific Partnership, through www.FlushTheTPP.org.

People are taking action to solve the still problematic housing market. An investment fund, Boston Capital, is buying distressed houses and then selling them back to homeowners at a reduced cost of 40%’. The city of Richmond, California is seizing underwater houses threatened with foreclosure through eminent domain and selling them back to homeowners at an affordable rate.

More broadly, this week Delaware, among the most pro-corporate states and the home of one million corporations, became the 19^th state to enact laws permitting “Benefit Corporations.”  These corporations allow companies to put people before profit. Their charter mission includes serving the public interest, not just making profit. Whether B corporations will be akin to “green washing” or real change toward public benefit remains to be seen.

Likewise, there are businesses that do take corporate social responsibility seriously, as Mohamed Yunus describes. He also states that “most of those companies don’t believe in CSR; they do it because it has become a cost of doing business. We can’t argue with good actions, no matter what motive drives them. But at heart such corporations are still the same soulless, profit-driven entities.” Time will tell whether CSR is beneficial overall or hides the harmful practices of some large corporations.

We do know that we are in a time of transition, an era that will define the next economy.  The effects of the neo-liberal economic agenda of privatization simultaneous with de-funding of public assets and services are becoming more obvious. People are fighting back in a number of ways. And greater awareness of economic democracy and modern monetary theory is growing. One thing is clear: it is going to take action from below to create an economy that puts people and the planet before profits.

Margaret Flowers

Margaret Flowers, co-director of Its Our Economy, is a Maryland pediatrician. After graduation from the University of Maryland School of Medicine in 1990 and completion of pediatric residency at Johns Hopkins Hospital in Baltimore, Flowers worked first as a hospitalist and then in private practice. She left practice in 2007 to advocate full-time for a single payer health care system at both the state and national levels. co-hosts, Clearing the FOG radio which airs on We Act Radio, 1480 AM. Her twitter is @MFlowers8.

Kevin Zeese

Kevin Zeese, co-director of Its Our Economy, is an attorney who has been a political activist since graduating from George Washington Law School in 1980.  He works on peace, economic justice, criminal law reform and reviving American democracy.  His twitter is @KBZeese.

  

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 [[email protected]]

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

---

"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 [email protected]

 

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

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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