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Creating a Community-Sustaining Economy

I often see defeatist comments from the “left” such as; “You have no viable replacement for capitalism,” or the pleading for higher taxes, or hoping for Washington DC to save us.

Just yesterday I was reading “Alternatives to Capitalism: The Next System Project” and the paper, “The Possibility of a Pluralist Commonwealth and a Community-Sustaining Economy,” referenced therein.

Quotes from The Possibility of a Pluralist Commonwealth and a Community-Sustaining Economy:

“Such possibilities are best understood as neither “reforms” … nor “revolution” … but rather as a longer term process that is best described as an evolutionary reconstruction …

Like reform, evolutionary reconstruction involves step-by-step nonviolent change. But like revolution, evolutionary reconstruction changes the basic institutions of ownership of the economy, so that the broad public, rather than a narrow band of individuals (i.e., the “one percent”), increasingly owns more and more of the nation’s productive assets.

We suggest that a growing number of openings for evolutionary reconstruction are becoming observable in many parts of the current American system, and that these openings could, if progressives seize upon them, become a potentially system-altering force over time.

“There are now also more than 10,000 businesses owned in whole or part by their employees; nearly three million more individuals are involved in these enterprises than are members of private sector unions. Another 130 million Americans are members of various urban, agricultural, and credit union cooperatives.

“One thing is certain: traditional American liberalism, dependent on expensive federal policies and strong labor unions, is in a moribund state in the United States. The government no longer has much capacity to use progressive taxation to achieve equity goals or to regulate corporations effectively …

From The Architecture of Enterprise: Redesigning Ownership for a Great Transition (also linked from “Alternatives to Capitalism: The Next System Project” ):

“As Alperovitz and Dubb emphasize, leaving the existing corporate economic system essentially intact, and hedging it around with further regulations, seems less and less to represent a successful path to a vibrant and sustainable future. … We may well, as Alperovitz and Dubb write, confront a “potentially decades-long period” in which the system “neither ‘reforms’ nor collapses in ‘crisis.’” This does indeed represent an opening for previously unprecedented strategic options—most promisingly, as they suggest, a step-by-step, evolutionary reconstruction of the fundamental social architecture of the economy. In short, it means redesigning the architecture of ownership.”

“Just as cows eat grass because their stomachs are structured to digest grass, and earthworms burrow in the dirt because their bodies are designed for burrowing, a cooperative bank tends to make good loans because it is structured to serve its community.”

“Generative ownership designs represent a critical piece too often missing from our view of the process of global transformation. They add a vital tool to our toolkit, as we strive to answer the challenge of making a transition from an economy organized around growth and maximum income for the few, toward a new economy organized around keeping this planet and all its inhabitants thriving.

Emphasizing the critical role of ownership design is not the same as suggesting that ownership design is a silver bullet that will solve all social problems. Changes of many different kinds—technological, political, cultural—will be needed, if we are to make a successful transition from one social order to another. Yet if ownership design is a central element of what shapes the workings of our economy, it is also largely invisible.”

“Expanding the range of policy options rests on an expanded vision. In the many generative ownership designs already functioning, we can glimpse a new kind of economy: one that at its core, is designed to create fair and just outcomes, benefit the many rather than the few, and enable an enduring human presence on a flourishing earth. This is likely the only kind of economy that, in the long run, can enable the planet and all its inhabitants to thrive.

Getting there will not be easy. But in broad strokes, what might a long process of evolutionary reconstruction look like? We might envision a global movement of citizens, investors, and businesses, both profit and nonprofit, working together to create a kind of pincer strategy. One arm would be aimed at reforming existing large companies, another at promoting generative alternatives. We may need different designs in different sectors; generative private ownership may be appropriate for producing goods and services, for example, while the stewardship model of commons ownership is better suited for natural resources. In different sectors, government might incentivize and ultimately require a phase-in of generative ownership. At some point society will need to tackle the redesign of the operating system of major corporations. If we do not do so, alternative designs may remain forever marginal, or face absorption. Yet trying to force all major corporations to change their core purpose may be the wrong place to begin. Starting with advancing generative alternatives could be a more likely route to success and could lay the ground work for bigger wins in the future. “

“If there are more kinds of generative ownership design than many people realize, then the scale of activity is also larger than we might suppose, particularly among cooperatives. In the U.S., more than 130 million Americans are members of a co-op or credit union. More Americans hold memberships in co-ops than hold stock in the stock market. Worldwide, cooperatives have close to a billion members. They employ more people than all multinational corporations combined. Among the 300 largest cooperative and mutually owned companies worldwide, total revenues amount to nearly $2 trillion. If these enterprises were a single nation, it would rank ninth on the list of the world’s largest economies.

The growth and multiplication of these many models represent a largely unseen ownership sea change rising across the globe. Taken as a whole, these ownership designs could create the foundation of a new kind of economy, a generative economy, where economic activity again serves its original purpose of meeting human needs. Generative ownership designs are about what the butcher, the baker, and the candlestick maker have always been about. That is, they are about serving the community as a way to make a living. The profit-maximizing corporation has been a detour in the evolution of ownership design, and a relatively recent one, historically.”

The “left,” as far as I can tell, is often  obsessed with Washington DC, and taxes, and re-distribution of wealth, rather than what these sane academics are suggesting, focusing on the initial design structure of organizations to equitably distribute wealth in the first place.

There is a huge difference between working for, or shopping at, an ESOP, or a co-op, and working for, or shopping at, an extractive corporation. If we don’t see this, acknowledge this, and act on this, there is little chance the public at large will acknowledge theses facts.

The facts are: there are more people in the US working for ESOPs and Co-ops than there are in private sector labor unions. But you will rarely hear information such as that reported from the corporate media. Because the corporate media has not woken up to the fact that they are fighting yesterday’s battles and the landscape around them is quietly evolving.

There are tons of facts about worker-ownershed enterprises that you will never learn from the corporate media, such as employee-owned businesses distribute equity ownership, ownership in the productive assets, throughout society, and build the middle-class. That employee-owned businesses are, on average, better companies than absentee-owned businesses, based on basically every known factor, including: productivity; entity longevity; employee retention; worker satisfaction and worker self-esteem; higher average employee retirement accounts; higher community involvement, by both the employees and the firms; and various other physical, economic, and psychological criteria. And further, as well as benefiting the individual employee-owners, it can easily be argued that employee-owned firms strengthen communities and build a more sustainable economy by retaining profits within the employee base, and therefore within their communities.

The world is evolving.

X-posted from Equitable Principles

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Grey Wolf

Grey Wolf