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Employee Ownership Needs Worker Owners

Ownership is the new black, orange, blue and green – socially cool in “new economy” advocacy circles with an economic justice edge, growing in corporate and cooperative numbers, and claiming superior sustainable practices. Divided into land, home, individual, and workforce “communities of practice,” ownership appeals to historically admired American values. Cooperatives (member-based, worker and union affiliated) and companies with varying degrees of employee stock ownership plans (ESOPs), individual proprietorships and partnerships connect ownership with cultural ideals of freedom, innovation, self-reliance, civic commitment, democratic decision-making, wealth-building through risk-taking, and equality-grounded opportunity and mobility. Incentivizing workers as owners in “doing well by doing good” projects and companies reflects core principles and practices as ineluctable components of the historical American Dream’s original civic promise. (more…)

Mondragons in Appalachia

Sixty years later, the global industrial worker cooperative phenomenon, Mondragon, inspired by a village priest, proves that a transformational solidarity economic vision backed up by decades of persevering sweat equity can make all the difference between endemic poverty and a sustaining middle class.

Yesterday at the Franciscan University at Steubenville, Ohio, I witnessed the privilege of seeing my niece graduate from the Buckeye Online School for Success (BOSS).  The ample auditorium hosted over 150 online, home-schooled, high school graduates, filled to capacity with beaming, cheering parents, neighbors and friends fully participating in a program reminiscent of a capacity attended “Mega Church” Sunday service for the faithful with Judson Laipply (“The Evolution of Dance”) as the commencement speaker. A good portion of the graduates received over $450,000 in scholarships for higher education studies and even though most of these students had never met each other before this ceremony, one could sense the strength and reinvention potential in this new kind of virtually bonding academic community in the middle of Appalachia. America transforming for the better right before its own eyes. (more…)

Millennials and the Bondage Economy

This year’s Oscar award winning film, “Twelve Years a Slave,” positions the past as prologue. America’s stakeholder versus shareholder dichotomy has grown as large as the .01 percent versus 99.09 percent national economic class divide resulting in the unholy trinity of rising and suffocating inequalities (income and wealth, social mobility and opportunity). Economists and business leaders are beginning to measure GNP net effects but still in their rear view mirrors.

Instead of “masters,” we have local and national oligarchs and plutocrats who prove that corporations are persons and that every dollar equates to a vote by renting elections, journalists, politicians and Supreme Court judges with impunity. U.S. Chamber of Commerce “bundlers” dismember, outsource and off-shore means of production without paying U.S. taxes or creating domestic jobs while Wall Street “Flash Boys” tilt the national trading playing field so steeply that it becomes a no-way-back ravine from greedy gulch.

Similarities abound between today’s declining civic ethos and mid nineteenth century,  pre Civil War era human flesh markets starting with America’s contemporary desperation class composed of  minimum wage workers toiling in America’s most praised corporations (e.g. Wal-Mart & McDonalds) who need public sector-funded food stamps to make basic ends meet. (more…)

Breaking Good

In today’s economically class-cleaved America, ideological resistance continues unabated to the deployment of government as a force for good especially in contentious change scenarios such as solving growing wealth and opportunity divides and the future of organized Labor (to name just two). Too often, progress is facilitated mainly through the prism of trickle-down tax code set asides to inspire transformational behavior which doesn’t materialize to the desired extent.

This disconnect between theory and practice leaves out working class populations most needing more direct inclusion to uplift the starkly narrowing middle class consumer base that is threatening the end of commonly understood consumption-driven capitalism. As a result, there may be a small opening for policy innovation starting with the tax code (“Changing the tax code could help curb inequality,” Lawrence Summers, The Washington Post). (more…)

Rebuilding the Yellow Brick Road

A new worker-ownership evolution-revolution featuring more virtuous capitalism communities of practice is demonstrating that doing well can realistically and profitably be based on doing good. This brave new economic world is emerging from green-shoot, “made in America” antidotes to structural unemployment and income inequality, sprouting ubiquitously among increasing absentee-owner-plagued urban and rural geographies. Hybrid home, land, and workplace sovereignty-recuperation models through local equity enterprises are building a “new green economy” equation, where labor seeks to operate in a permanent seller’s market as does domestic energy sourcing with renewables and distributed generation serving as means to better, more sustaining, stakeholder-centric ends.

Societal benefits from this approach are inclusive and sustaining. Comparative labor advantages are sourced locally, stakeholders equate to shareholders, and profits recycle to the businesses and communities that produce them. Local labor regains its natural place-based sovereignty in regards to its relationship with local and exterritorial capital which, while necessary and hopefully sufficient, is subordinated to the needs of the working class people and communities it finances instead of the reverse. Under this approach, solidarity as a founding American immigrant-inspiring and hosting community principle so closely aligned with freedom and daily liberties is reborn, rewired, and reused. (more…)

Public/Private Sector Ownership Proposal (P2SOP)

A new socio-political populist movement is sweeping America in reaction to the 2008 financial tsunami of deregulated, greed-based causes and massive wealth transfer effects or receipts to the financial one-percent. Based purely on the numbers seen to date, this movement is and will be composed of rising and current Millennials and the “Net Generation” or “Generation Edge”, immigrants and minorities, plus any white person with a progressive conscience. Converging as a new coalition of the socially and technologically willing, these voters (unless effectively wholesale disenfranchised) will provide a national elections cycle majority for decades as America becomes a majority minority country even though some geographical revisionist and recidivist pockets will persist (such as the Mason Dixon healthcare divide) based on political gerrymandering and subtext political culture.

Represented in numerous cross-pollinating private and nonprofit sector organizations across the country, this movement reacts to no-way-out diminishing expectations and desperation. Practitioners are studying and forming various hybrid, virtuous cycle, cooperative and collaborative capitalism models that honor individual initiative in the context of broad-based and transparent stakeholder ownership centered in “local living economies.” (more…)

When the Right Ones Get It Wrong

The Mondragon Cooperative Group (“Humanity At Work” through Cooperation, Participation, Social Responsibility and Innovation, headquartered in the Basque region between Spain and France) is ranked as the world’s largest worker-owned industrial cooperative group but also as the top Basque industrial group, tenth in Spain with 80,000 personnel, a presence in 70 countries, and winner of the 2013 Financial Times “Boldness in Business” award. Mondragon’s 60-year mission is to generate wealth for society through values-centric and market competitive business development and job creation under the “one worker, one vote” cooperative framework where labor is sovereign and capital, while essential, is subordinate to sustaining job creation.

Yesterday, Fagor Electrodomestics, which evolved from the original Mondragon household white goods manufacturing cooperative (ULGOR) to hold almost a third of its domestic sector market share for decades, was declared formally insolvent (859 million Euros in debt, 5,642 jobs at risk, 100,000 Euros left in the corporate account). Predictably, global media “punditcrats” have wasted no time in jumping on the “see, I told you so” bandwagon. Case in point, The Economist, “Trouble in workers’ paradise – The collapse of Spain’s Fagor tests the world’s largest group of cooperatives.” This publication and others speculate as to whether cooperatives and similar hybrid forms of worker ownership can survive the “real world” of boom or bust cycles that both predatory and virtuous capitalism practices mete out to passive adherents and active practitioners, beneficiaries and victims.

Also yesterday, Mondragon’s social mutual, Lagun Aro, announced it would propose a 1.5% raise in contributions from all members at Mondragon’s next General Assembly to support its role in providing additional unemployment benefits to displaced Fagor Electrodomestics worker-owners. This other news received only local media coverage and therein lies the conventional wisdom disconnect from the healing power of practicing metrics-based solidarity. (more…)

Corporate & Capitalist Transition & Transformation Models

Paper submitted by Michael Peck (Mondragon USA), Steve Dubb (The Democracy Collaborative, University of Maryland), and Rob Witherell (United Steelworkers Union) for the “Corporations in a Great Transition: Visions, Models, and Pathways for Transformation” event hosted by the Tellus Institute & MIT Sloan School of Management, in Boston on October 31st & November 1st, 2013.

Capitalism at a Crossroads

Although the theme of this roundtable is “Corporations in a Great Transition,” the authors would argue that corporations, especially those in the financial sector, mostly have not transitioned at all. Instead, the increasing wealth inequality and diminishing social mobility experienced by the United States reflects a capitalist system protecting shareholder-centric relics of past century technology and socioeconomic realities rather than the empowered stakeholder movements we see and in which we participate. In this anachronistic context, shareholder value is measured more on perception and popularity than on actual long-term performance and real wealth creation. Meanwhile, share ownership for the vast majority of people means little more than legalized gambling with an account balance.

  • Case in point: Apple’s market capitalization recently increased by $10 billion overnight simply because of a report the CEO had dinner with a prominent investor.

Alarmingly, the traditional capitalism concept of building value over the sustainable long term has been tossed aside and replaced with maximizing short term profits at the great expense of anything sustainable, starting with the basic right of people to “life, liberty, and the pursuit of happiness.”

  • Case in point: A major pharmaceutical company recently announced it would lay off thousands of its employees and abandon a number of research and development projects to focus on higher profit margin drugs because their profit margin wasn’t perceived to be high enough.
  • Case in point: Vulture capital firms scoop up undervalued, but profitable companies either to doctor their income statements so the acquired business can be resold at a higher price, or suck out as much cash from continuing operations as possible until the carcass of plant, property and equipment can be sold off for a few dollars more.

In these cases, the cure is visibly worse than the disease for those left disenfranchised and behind. Jobs are eliminated and shipped to whichever place can offer the lowest poverty wages for workers coupled with the least restrictions on safety and environmental conditions. This is because global labor arbitraging has become the predatory capitalist market mechanism instrument of choice. We have replaced “slavery based on race and color” with a new form of slavery based on lack of ownership, viable options and means. (more…)

The Reading Revolution

The debate over who lost Detroit and how to fix it rages on while Politico reports in “Break-up-the-big-banks fever hits the states” that legislators from “at least 18 states have introduced resolutions this year calling on Congress to split up banking giants by putting back in place a wall between commercial banking, taking deposits and making loans, and investment banking, the world of traders and deal-makers.” It turns out that quarantining the banksters and salvaging our cities have a lot in common in an America that currently ranks below Zimbabwe in global income inequality and social mobility.

The key issue facing America’s liposucked cities is how to monetize assets without giving up public sector control. (more…)

Judo Inequality

“Think about it this way. We’re killing people in foreign lands in order to extract 200-million-year-old sunlight. Then we burn it . . . in order to boil water to create steam to drive a turbine to generate electricity. We frack our own backyards and pollute our rivers, or we blow up our mountaintops just miles from our nation’s capital for an hour of electricity, when we could just take what’s falling free from the sky.”

– Sungevity founder, Danny Kennedy –

From “The Secret to Solar Power,” (New York Times, August 9, 2012), by Jeff Himmelman

Subconsciously but in good conscience, Danny Kennedy has framed a solar version of the new “Judo Economy” paradigm. In his “Judo Economy” energy framework, massive amounts of naturally incoming energy are reflected and redirected without impacting and hollowing out the earth’s layered crust, breaking up shale formations, absorbing and contaminating fresh water supplies, or inciting earthquake and volcanic instability. Naturally occurring momentum is deployed as a positive force to society’s advantage as opposed to boxing with the inevitable and unmovable, absorbing one crushing body blow after another. (more…)

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