TINA? Part 2

In the part 1 I addressed the Caja Laboral Popular (CLP) of the Mondragon Cooperative Corporation as one example of an alternative to capital. In this posting I want to address other alternatives.

According to Gar Alperovitz, in his book “America After Capitalism”, a Community Development Corporations (CDC) is a “self-help entity that operates at both the community-building level and the economic level.” He goes on to say that the CDC, “initial goal involved a community-building vision and included the provision of services, the ownership of productive enterprises, and advocacy on behalf of local residents.” Along with CDC’s there are Community Development Financial Institutions (CDFI’s), which are meant to provide credit and capital to low income and economically distressed communities.

One example of a CDC is the Bedford Stuyvesant Restoration Corporation (BSRC) in New York City. The BSRC provides start-up capital along with other assistance to local businesses as well as training programs for local residents. The BSRC is self-funded through its ownership of Restoration Plaza, a construction firm, a property management company, a supermarket, and a theater.

http://restorationplaza.org/

Another example is the Kentucky Highland Investment Corporation (KHIC), which seeks out and provides venture capital as well as ongoing support for entrepreneurs in areas of Southeaster Kentucky with high poverty. One of the requirements of these new enterprises is that they must promise to hire unemployed residents from those areas.

http://www.khic.org/

We’re now prepared to explore a possible model of non-capital investment mechanism to replace capital, which will be covered in a future installment.

TINA? - Part 1

There’s a popular myth that in 1899 the Commissioner of the U.S. Patent Office, Charles H. Duell, was to have written, “Everything that can be invented has been invented.” An equally absurd comment is often attributed to Margaret Thatcher in reference to global capitalism, “There is no alternative,” which is often reduced to the acronym TINA.

The use of TINA proves that the capitalist apologetics are simply out of ammo in the war of words with critics. It further shows that there is a serious need for us critics to provide that better alternative that we claim is out there. If we fail to do so then we run the risk of proving that the Iron Lady was indeed right and that there is no alternative to capitalism.

There are several real world examples in operation today by which a framework can be built of a better alternative system of investment. In this posting I will address just one example, which is the Caja Laboral Popular (CLP) of the Mondragon Cooperative Corporation.

An important aspect of the CLP is its Empressarial Division, which is responsible for establishing new cooperatives within the MCC. It provides the needed investment and then provides support, such as product development, until the new cooperative is established and is fiscally sound. The CLP is self-sustaining for it funds itself and the ongoing creations of additional cooperatives largely through the deposits made by those same cooperatives that it had helped to create, which have nearly a 100% success rate.

The Caja Laboral Popular provides us one glimpse of an alternative investment system. In future postings I will address other examples of alternatives to capital.

What Would Jesus Buy?

Once in a while a movie comes along that is so important that it must be seen. One such movie is “What Would Jesus Buy”, which follows Reverend Billy and the Church of Stop Shopping. The good Reverend along with his choir travels the country calling the corporations to repent for their greed and for people to “stop shopping!” During the movie he clarifies that this hyperbole is actually a call to get us to moderate our shopping, choose our goods wisely, buy American, and spend our dollars locally so that the money stays in the community.

If you see no other movies this holiday season go see this one.

Visit the official movie site at http://wwjbmovie.com/

An Authoritarian Oligarchy

“It has been said that democracy is the worst form of government except all the others that have been tried.” ~ Winston Churchill

It’s important to point out that in an economic democracy the primary goal of a non-capitalist investment system, as mentioned in several previous posts, would be the creation of economic enterprises that are owned and democratically managed by the workers of those same enterprises.

Capitalist firms are actually authoritarian governances. The employer controls when and where one eats, when one can use the restroom, how one can dress, when one can speak, to whom one speaks, and in what manner one speaks. Even if the employer doesn’t exercise such authority it’s usually because they choose not to rather than being restricted from doing so.

Most capitalists will acknowledge the reality of the dictatorial employee-employer relationship but will say that it’s not a problem because the employee has a legal right to quit. This denial of a problem ignores the hardship and risk involved with being unemployed. Plus, changing jobs simply means going from one dictatorship for another in the hopes that the next will be less abusive and degrading. The worker is not truly a free agent but is dependent upon the employee-employer relationship for his or her survival.

Even if an employee purchases shares of stock in their own firm they won’t have enough shares to exert any form of governance over their own workplace. In reality only a small percentage of Americans own controlling shares in the corporations. The capitalist mode of production is not only authoritarian but oligarchic.

This authoritarian oligarchy extends to state socialism as well. Whether the workplace is managed by a capitalist class or a bureaucratic class the worker is still in an economic dictatorship.

Democracy can be defined as government by the governed. It’s time for democracy to be expanded from its current limit of public self-governance to also include economic self-governance.

Market Economy - Part 2

Past, Present, and Future Markets

Past
In all of the market economies prior to capitalism markets were embedded in society and existed primarily to serve the needs of those societies. It was shown by the preeminent economist Karl Polanyi that in those previous economic systems market relations were less important that social relations, reciprocity, and community obligations. Whenever markets did attempt to rise to power then society pushed back. Such push-back is evident from a 14th century document in which profitable merchants were described as “Man-haters” who were opposed to the common good.

Present
In capitalism private investment (i.e. capital) mediated through the financial market utilizes the labor and retail markets to increase itself. This increase is a necessity because capital is by its very nature expansive. When allied with the power of the State then capital successfully forces the disembedding and ascension of market relations from society resulting in capital achieving and maintaining social dominance. Society and culture now must serve the market.

Future
Since capital enters the economy through the financial market in a post-capitalist economy the financial market would be replaced with non-capital mechanisms of investment. This absence of capital would not mean the end of the other markets. Markets, such as labor and retail, would continue to exist but would evolve to take on new roles and functions in society.

There’s much we can’t know about the evolution of markets in a future economic democracy. But one thing we can say with confidence is that with the absence of capital then we should expect to see a re-embedding of markets into society. Markets would return to their historic and natural role of serving society rather than forcing society to service them.

Veterans and the Health Care Crisis

Since today is Veteran’s Day I decided to delay posting part 2 on market economies but to instead this week address how large numbers of veterans, when they return from serving their country, are denied access to basic health care.

In a recent study, "Lack of Health Coverage Among U.S. Veterans from 1987 to 2004", it was revealed that as of 2004 nearly 1.8 million veterans lacked health care coverage. When one included the members of their households then the numbers without health care coverage shot up to 3.8 million.

This lack of health care coverage for veterans and their families is symptomatic of a larger problem in our society. According to the study, "Like other uninsured adults, most uninsured veterans are low- to middle-income workers, who may be too poor to afford private coverage but are not poor enough to qualify for Medicaid or free VA care." In other words, the problem of the lack of health care coverage for our veterans is the same as those found in the general public.

There are “third way” solutions to providing health care coverage to veterans and indeed to all Americans. Those solutions will be addressed in future postings. At this time it is sufficient to say that high-quality, affordable health care is a fundamental human right. Our “leaders” in Washington need to wake up and realize that we are not consumers of health care anymore than we are consumers of the air that we breathe. Without both we die.

Market Economy - Part 1

A Definition & Some History
In a comment to my posting, “Economic Democracy: The Basics”, a reader stated that he thought private financing was a basic feature of market economies. I wrote in my reply that I would later post details as to why that assumption is wrong.

A definition is necessary. By “market economy” I mean an economy where goods and services are provided via a market exchange rather than either communal sharing or State distribution.

Market economies were around long before capitalism.

All the way back to ancient Rome there were merchants (Mercatores) as well as markets, such as the famous Forum. It was primarily through these markets and from these merchants that Romans acquired their goods using Imperial coinage for money. But this market economy didn’t operate based on private investment. Though there were financiers (Negotiators) the Roman economy was based on slaves who provided largely agricultural labor, upon trade with other cultures, and on draining the conquered people of their resources.

During the Middle Ages there were also market economies. Goods were sold in the markets of the towns and villages as well as at the annual Fairs. Yet the economy of the Middle Ages wasn’t based on private investment as we know it but largely upon tribute paid vertically between classes and individuals, which were decided by inherited property and social ranking (fief).

In capitalism goods and services are still sold via the market but now there is also a financial market in which shares of economic ownership are bought and sold (i.e. private investment). This financial market dominates capitalism in the way slavery dominated Rome and fief dominated the Middle Ages. Due to its central role in capitalism it gives the appearance that it is the defining feature of market economies. It is upon a closer look that one find’s that it’s clearly not.

While private investment is an essential feature of capitalism it is not an essential feature of market economies.

Coming Soon: Past, Present, and Future Markets

Vast Wasteland

In 1961 the chairman of the FCC, Newton Minow, made his famous speech before the National Association of Broadcasters in which he invited them to spend an entire day watching their own TV stations. He told them that they would find that television was a “vast wasteland.” Since television is a vast wasteland then the modern corporate news media should be considered the Sahara desert.

US television media is owned by only nine corporations: AOL/ Time Warner, AT&T, GE, News Corporation, Viacom, Sony, Vivendi, Liberty Media, and Disney. As investor-owned firms these corporations are legally obligated to maximize the profits for their shareholders. This demand invariably creates situations in which there are conflicts between those who are to report the news and the news itself. If corporate-owned news media outlets have to choose between their legal obligations to their sponsors and shareholders, both of whom hold the corporations money strings, or the news they have no choice but to satisfy the interest of their investors and sponsors.

One example of such a conflict is ABC (Disney) and its close relationship with Wal-Mart. In the past Wal-Mart has sponsored the Good Morning America segment “Only in America” and has been a regular sponsor of World News Tonight’s “Person of the Week” segment. So is there any proof that their sponsorship has had an effect on the objectivity of the news broadcast? ABC has since run segments on how Wal-Mart could teach FEMA about handling disasters, how Wal-Mart is going green, and how Wal-Mart is improving life in China. Is it just a coincidence that they tend to give positive stories on one of the worst corporations who also just happens to be a regular sponsor? I don’t think so.

Can anything good be found in corporate television news? If one looks hard enough one can find the occasional oasis in that desolate realm. One such oasis is Keith Olbermann who host’s MSNBC’s “Countdown”. While his “Special Comments” have earned him well-deserved acclaim it’s what he said about the Green Bay Packers on the October 7th broadcast of NBC’s “Football Night in America” that showed how impressive he truly is.

“When it's all about small markets and large markets and revenue streams, there is a pro football franchise in Green Bay, Wisconsin… How does Favre get to cavort in Green Bay when Green Bay is a vestige of a time when the NFL was made up of the Duluth Eskimos, and the Staten Island Stapletons and the Pottsville Maroons? The Packers have survived since football's Stone Age because of non-profit community investment. The fans, in essence, own that team. TV revenue sharing saved that team in the '60s and limiting free agency saved it again in the '80s. Green Bay, Wisconsin, population 102,313… should be the model for sports franchises in this country, instead it's an anachronism." (Source: 'Football Night in America' Week 5 Quotables, Published: October 7, 2007)
To see and hear his whole fantastic commentary visit:
http://www.truveo.com/NFL-in-Green-Bay/id/3903930899

As long as there is corporate ownership of the television media then great commentators such as Keith Olbermann will be far and few between in that barren land.

Economic Democracy: The Basics

We can talk about replacing global, corporate capitalism with an “economic democracy” but what do we mean by that? What would an economic democracy consist of? Different authors have given various definitions and not all agree on the details. For the purpose of this blog here is what I mean by “economic democracy”:

• An economic democracy would be a market economy,
• The core economic unit would be based on autonomous, democratically-governed, worker-owned cooperatives,
• Not all economic enterprises would be co-ops for there would also be an increase in the number of family-owned enterprises and sole-proprietorships,
• Both types of enterprises would be networked together by economic councils that would allow for mutual aid and input from the community,
• There would also be the existence of non-profit and community-owned enterprises for services that cannot be provided by either co-ops or sole-proprietorships,
• Investment would be provided by public sources, such as governmental bodies and non-profit NGO’s, rather than private capital,
• There would be extensive support to individuals and the various enterprises by local, state, and federal governments.

In my opinion these are the essentials of an economic democracy.

Draining the Swamp

It might seem odd to use such an environmentally un-friendly title for an article about global warming but stay with me on this.

The time was the early days of the twentieth century. France had just abandoned their attempt at building the Panama Canal. The US had decided it was going to give it a try and had purchased the land and equipment from the French. But the same problem that had plagued the French was causing problems with the US workers. Disease was rampant. Specifically the problem was yellow fever and malaria. If the canal was going to be built these diseases had to be brought under control.

The US had settled on what, at that time, was a controversial cause of the diseases. They had concluded that the diseases were being spread by the mosquito. If they were correct then eliminating the mosquito would eliminate the disease. They then proceeded to take various steps, which included draining the swamps around the construction area. The Americans were right and in doing so they reduced the mosquito population, stopped the diseases, and built the canal.

Today we face a greater challenge. Global warming and environmental degradation threatens to wipe out majority of all species and endangers human civilization. Like the early twentieth century scientists we’ve identified the delivery mechanism of the global disease: Carbon Emissions generated from human activity. The mistake we make is to assume that “human activity” means that industrialization is the source. Industrial activity is not the source of global warming but is only one more step along the path to find the source. What is the ultimate source of global warming? In a word: capitalism.

The expansive nature of capital (i.e. private investment) demands that corporations perpetually seek greater and greater profits for their investors. This requires slashing the costs of production. One way to do so is to use the cheapest, oldest, and as a result, dirtiest technology. In addition, rather than naturally seek out improved technologies, author Naomi Klein has documented how capital has learned that there’s massive profit to be made in disasters (see “Disaster Capitalism” in Harper’s October 2007). Environmental degradation is good for profit.

Global warming is the sickness. Carbon emission is the disease. Cheap and dirty technology is the carrier. Ultimately capitalism is the source. It’s time to drain the swamp.

What is the Third Way?

The term “Third Way” is used by a variety of groups with very different agendas. Some liberal capitalists organizations, such as “The Third Way: A Strategy for Progressives”, use it to try to build a progressive political agenda in the US. Yet, there’s a growing trend in which the term is used to represent something much more radical. It’s often used as a label for an alternative to both capitalism and state socialism. That alternative is commonly called Economic Democracy.

Now we’ve exchanged one term for another. So what is meant by an “Economic Democracy”? While there are several variations, a growing consensus is developing of a decentralized socio-economic system in which the primary economic unit would be a worker-owned, democratic firm rather than an investor-owned corporation. In most models the democratic firms would be based on worker-owned cooperatives that follow the International Co-operative Alliance principles.

One of the amazing aspects of the Economic Democracy model is that, unlike other some other proposals, it is based on real world economic enterprises that have been proven to work. The Mondragon Cooperative Corporation, for example, has long been proven profitable and very successful. And repeated studies have shown that cooperatives and workplace democracies are, in general, far more productive than capitalist corporations.

There are still many issues to be worked out. But there are people working to solve these issues and great progress is being made quickly. It may be that the long nightmare of capitalism is nearing an end and that humanity can finally awaken to the light of a new dawn.

Welcome!

Welcome to my new blog. I hope to post regular commentaries about economic democracy, the dangers of corporations, and dreams of a hopeful future.
Check back soon!