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A Lone Cowboy with a White Hat

7:33 am in Uncategorized by Grey Wolf

White HatA basic tenet or belief often preached is that capitalism is a partnership between labor and capital, or capital and labor.

It shouldn’t matter which is listed first in a true partnership where profit is divided 50-50.

Since its inception, probably because it benefited them, and not from some confusion, capitalists have structured most corporations to transmit 100% of profits to the humans who contribute capital and 0% of profits to the humans who contribute labor to the partnership.

Some may protest at this point that the human laborers are paid a wage. That is true. Whether it is a whip or a wage, an incentive is required to transform a human into labor. To create a profit-creating corporation the owners, the creators, needed labor.

Captured slaves were burdensome to own and created multiple problems, while the capitalists realized that rather than providing food and shelter to the captured slaves, letting free-range humans struggle and fight for wages that indirectly provided them food and shelter could be more profitable. Higher finance evolved from profiting from owned humans to profiting from leasing the necessities of life to the humans, on credit. Humans will go into debt for food and shelter … and education and healthcare and transportation and … heck, sell them picks and shovels.

So preaching that capitalism is a partnership while structuring the corporations to transmit all profits to the capital owners appeared most beneficial. But Henry Ford yelled long ago to the other capitalists that labor needed to at least have enough cash to purchase the products the capitalists were selling.

But it is just too counter-intuitive to believe that paying higher wages, or, horror-of-horrors, sharing profits with labor, could somehow benefit the owners of capital. Naturally, most wages were always set at the lowest rate required to create the incentive for the human to correspondingly go into an offsetting debt for education and such. Doctors and lawyers demand higher wages because of the increased risk (of unemployment and debt) to the humans. Finance is about shifting risk. The risk of a slave owner having to feed valuable slaves through a drought has been shifted to the free-range humans gambling with their lives that they can reap enough in wages to pay off so much debt as they may acquire, from tech school to a doctorial degree.

So the connection between the health of humanity, and the health of humanity’s environment, is not naturally obvious to capitalists, though it is slowly becoming more apparent from observation. And individual examples are appearing throughout the economy.

Nucor Steel (wikipedia) is the most sacred corporation in the world, as far as I am concerned, though I am biased and have a US-centric worldview. Nucor Steel pays labor a percentage of profits, and shareholders receive a respectable dividend. Nucor corporate charter requires that at least 10% of profits be paid to labor’s profit sharing plan, but often pays extraordinary bonuses to labor based on strong profits. There’s even an entertaining book about Nucor.

I have always been perplexed by sports fans. It is readily apparent that we become fans of football teams based on random geographical criteria, not because of the personnel, or management, or behavior or what-have-you. Why should I be a Clemson or Georgia fan? Wouldn’t it make more sense to research teams and choose one based on the quality of players or coaches? Or because the team donates some profits to a worthy cause?

I have researched the teams and Nucor Steel is the most ethical I have found. I am a Nucor Steel fan.

Publix Supermarkets and the Evergreen Cooperatives are close runner-ups. Publix is an ESOP and the Evergreen Cooperatives are cooperatives. Merging the labor and capital categories avoids the ethical decision about the division of profits between labor and capital, but the lack of incentive to the capitalists makes creation, and existence, of such companies unique anomalies. New Era Widows is a new team that I’m watching, and there is of course the big foreign coop, Mondragon.
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Creating a Community-Sustaining Economy

11:32 am in Uncategorized by Grey Wolf

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.”

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Thoughts on jobs, etc.

4:26 am in Uncategorized by Grey Wolf

[An email I sent recently.]

Friend,

You seem rational, educated, compassionate, etc. and thought you could give me some outside perspective. (Here’s a rambling overview ….)

I am interested in starting a non-profit business that starts for-profit ESOPs.

Many things have contributed to my thoughts.

JaxLegalAid was involved in a program to help ex-cons start businesses. (I haven’t seen any evidence of success…)

I spoke with a Libertarian at school who felt the lack of ownership rights was at the root of the BP spill;
“When people own something they take care of it… sell off the Gulf of Mexico…”

I agree about the ownership stake …

Publix is the largest corporation out of Florida, and is an ESOP. An acquaintance who works at Publix says after five years he now has $5000 in Publix stock. I don’t understand why the workers don’t show a preference about where they work… but the workers at Publix sure seem friendlier than those at Winn-Dixie …

Jobs create wealth for the corporations. When I worked as a freelance lighting tech the company would pay me $12/hr and bill the client $36/hr. When I went to law school professors pointed out that you have to bill three times your wage; if you make $50,000/year you need to bill $150,00/year. That’s how capitalism works. One third to pay you, one third to pay for the building, the equipment, the electricity, whatever, and one third for the money men, the capitalists, profit. So, getting a job is getting exploited, getting taken advantage of, basically, for chumps. But thats what we [working class chumps] teach our kids; “Get a job.”

(The SBA is worthless… but that’s another story…)

And everyone knows that a house is “the average Americans largest investment, their largest asset” Yeah, the average chump. From the business perspective it is just a very big widget to sell the average consumer. Reagan said, “Buy a house ['cause I have stock in Lennar Homes…"]

Obviously, instead of teaching our kids “to get a job” and “buy a house” we should be teaching “start a business.”

I believe this could be done sustainably. Loan a group $50,000 to start a business, they pay back 10,000/yr and they “buy-out” the business and are the employee-owners, and the loan is repaid with interest!!

I’ve thought about this from many more levels….

I’ve thought about approaching Peter Rummell, a wealthy local business man who “switched sides” and contributed $100,000 to Alvin Browns mayoral race and now is with the Urban Land Institute (ULI).

I’ve thought about approaching Chef Gordan Ramsey: “Hey, we have ten folks that are starting a restaurant… you can do a TV show that would inspire people…”

I thought about creating support by writing blogs. But comments are very tepid. Again and again people are like, “Just give me a job…” I see no ambition to be part of the ownership…! Just more, “Give me a job… I’ll work to create a profit for somebody else”

I wonder if I should continue down this path. Why should I help these fools. I should just buy a boat and sail off
to the Cayman’s…

Even after I explain all this to people, they are like, “Just give me a job… I’ll work to create a profit for somebody else… ” Yet working for Wal-Mart, or Raytheon, or BP, just creates more profit for Wal-Mart, or Raytheon, or BP, who then hire more lobbyists…

People are in fear, and overcompensate by acting macho and independent. (I joke, “the bigger the pick-up truck, the smaller the penis.” People over-compensate for their weaknesses.

They convince themselves that getting a job is independent — but it is pure subservience to the corporation. At least the folks at Publix are working for their corporation, one they have part ownership in.

Politics and the economy and culture are all intertwined.
We need to build a culture of true independence, where kids want to start a restaurant or a software company. (Of course you can make a lot more money working as an engineer at Raytheon than running a flower shop. But, at Raytheon you are spending your time working to pay for your own wage and then both to pay the owner’s electric bill and making the owner a profit, and, ultimately, the job isn’t very secure…)

Writing blogs and trying to generate interest is frustrating, and I am starting to think it’s the wrong way to go.

That’s where my thoughts are at this point…

Again, you seem rational, educated, compassionate, etc. and I’d like to sit down over a beer and hear your thoughts…

Drop me a line whenever.

 

Crazy thoughts

4:42 am in Uncategorized by Grey Wolf

So my thoughts are starting to coalesce into a semi-coherent plan. (If I said this to any of my friends they would, since they know my personality, undoubtably laugh, or at least chuckle… they would think, “Danger, danger Will Robinson!”) I have this concept, this thought, and it dwells in the shadows of my mind and takes over my thoughts in quiet times of contemplation, and I polish the concept.

The thought that occupies my mind is, in the simplest words, starting a business that starts businesses. Obviously, the thought is greatly polished by this point. It is fancy by now and I call it a concept, and I have many layers of thought attached to that concept. At the start is the reason why I want to do this. The reason is itself a many-layered story.

I was going to point out that these days it has become much more common for people to notice the corporate bias built in to modern reality, but it occurs to me I should start back even further in time, back before I had the thought that became a concept.

The thought grew from other thoughts, thoughts on interconnectivity and arrogance. That everything is so greatly interconnected and overlapped that none of us can truly perceive the extent, and that we are also all so arrogant that we are, to some extent, willfully refusing to perceive.

I’d like to say one word on arrogance here. I pointed out the wisdom within a line from a Who song: “Nobody knows what it’s like to be the bad man…” Of course my friend just said, “Yeah, it rhymes with ‘sad man’.” I went on to explain that nobody ever feels that they are the bad man; nobody. Everybody has a perfectly reasonable explanation for their actions, reasonable explanations we can all somewhat agree with, or at least have heard before and understand. From the person who is late for an appointment and leaves their fast food bag of trash in an inappropriate place as they rush off to an interview, to the executive making a cost/benefit analysis on a piece of [safety] equipment for the factory, or an oil rig.

Later, each decision might be called bad. Not just incorrect ‘bad’, but morally wrong ‘bad’. That’s human arrogance. Even though we have each done something bad at some point, something evil, none of us feels evil. That’s human arrogance. Nobody knows what it’s like to be the bad man…
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