Category Archives: Living Wage

Capitalism Crises Should Send Us Back to the Drawing Board

Modern culture assumes the natural order includes a capitalist philosophy – it is not necessarily the case. Here is a very simple and informative animation that explains how we think about the roots of our current economical crises.

In reality, there are alternatives to capitalismRichard Wolf of the Guardian UK explains based on first hand observation:

Modern societies have mostly chosen a capitalist organization of production. In capitalism, private owners establish enterprises and select their directors who decide what, how and where to produce and what to do with the net revenues from selling the output. This small handful of people makes all those economic decisions for the majority of people – who do most of the actual productive work. The majority must accept and live with the results of all the directorial decisions made by the major shareholders and the boards of directors they select. This latter also select their own replacements.

Capitalism thus entails and reproduces a highly undemocratic organization of production inside enterprises. Tina (short for Euro style capitalism) believers insist that no alternatives to such capitalist organizations of production exist or could work nearly so well, in terms of outputs, efficiency, and labor processes. The falsity of that claim is easily shown. Indeed, I was shown it a few weeks ago and would like to sketch it for you here.

In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production.

MC is composed of many co-operative enterprises grouped into four areas: industry, finance, retail and knowledge. In each enterprise, the co-op members (averaging 80-85% of all workers per enterprise) collectively own and direct the enterprise. Through an annual general assembly the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how and where to produce and what to do with the profits).

As each enterprise is a constituent of the MC as a whole, its members must confer and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the co-operatively and democratically adopted rules governing the MC limits top-paid worker/members to earning 6.5 times the lowest-paid workers. Nothing more dramatically demonstrates the differences distinguishing this from the capitalist alternative organization of enterprises. (In US corporations, CEOs can expect to be paid 400 times an average worker’s salary – a rate that has increased 20-fold since 1965.)

Given that MC has 85,000 members (from its 2010 annual report), its pay equity rules can and do contribute to a larger society with far greater income and wealth equality than is typical in societies that have chosen capitalist organizations of enterprises. Over 43% of MC members are women, whose equal powers with male members likewise influence gender relations in society different from capitalist enterprises.

MC displays a commitment to job security I have rarely encountered in capitalist enterprises: it operates across, as well as within, particular cooperative enterprises. MC members created a system to move workers from enterprises needing fewer to those needing more workers – in a remarkably open, transparent, rule-governed way and with associated travel and other subsidies to minimize hardship. This security-focused system has transformed the lives of workers, their families, and communities, also in unique ways.

The MC rule that all enterprises are to source their inputs from the best and least-costly producers – whether or not those are also MC enterprises – has kept MC at the cutting edge of new technologies. Likewise, the decision to use of a portion of each member enterprise’s net revenue as a fund for research and development has funded impressive new product development. R&D within MC now employs 800 people with a budget over $75m. In 2010, 21.4% of sales of MC industries were new products and services that did not exist five years earlier. In addition, MC established and has expanded Mondragon University; it enrolled over 3,400 students in its 2009-2010 academic year, and its degree programs conform to the requirements of the European framework of higher education. Total student enrollment in all its educational centers in 2010 was 9,282.

The largest corporation in the Basque region, MC is also one of Spain’s top ten biggest corporations (in terms of sales or employment). Far better than merely surviving since its founding in 1956, MC has grown dramatically. Along the way, it added a co-operative bank, Caja Laboral (holding almost $25bn in deposits in 2010). And MC has expanded internationally, now operating over 77 businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to – and competitor of – capitalist organizations of enterprise.

During my visit, in random encounters with workers who answered my questions about their jobs, powers, and benefits as cooperative members, I found a familiarity with and sense of responsibility for the enterprise as a whole that I associate only with top managers and directors in capitalist enterprises. The easy conversation (including disagreement), for instance, between assembly-line workers and top managers inside the Fagor washing-machine factory we inspected was similarly remarkable.

Our MC host on the visit reminded us twice that theirs is a co-operative business with all sorts of problems:

“We are not some paradise, but rather a family of co-operative enterprises struggling to build a different kind of life around a different way of working.”

No one is supposing that alternatives to capitalism are all sunshine and lollipops, there will always be challenges that arrive, but with a shared interest in efficiency, profit making, and employee quality of life, the solution sounds more fair for more people. The fruits of productivity can raise the standard of living for all, workers really can reap what they sew.

If nothing else, it is time, like the animation showed, to seriously debate and discuss the entire capitalist system.

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TPP – Obama Punches Democracy in the Gut

Obama is in big trouble. Progressives already are not thrilled with Obama. NDAA authorizes defense spending and indefinite detention of American citizens without charge, there’s his wishy washy defense of the environment (BP oil spill, fracking, pipelines),  his use of drones, his continued engagement in war, and his bail out of banks. But hey, Progressives leave room to grow and he talks a good game, plus he had a much more typically American upbringing than his privileged opponent in that he struggled with a single mom and worked his way up. Obama talked about empathy, his wife is into growing organic gardens, the family is much more “of the people” and can speak to the people better than the Romneys, for a while it seemed like Obama would win easily.

Now it doesn’t. Continue reading

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Lakoff’s analysis of Wisconsin

Here is the post-mortem for Wisconsin from George Lakoff (one of the inspirations for this blog) and his colleague, Elisabeth Wehling. As always, values trump issues or policies. The post can be found here.

The Wisconsin recall vote should be put in a larger context. What happened in Wisconsin started well before Scott Walker became governor and will continue as long as progressives let it continue. The general issues transcend unions, teachers, pensions, deficits, and even wealthy conservatives and Citizens United.

Where progressives argued policy — the right to collective bargaining and the importance of public education — conservatives argued morality from their perspective, and many working people who shared their moral views voted with them and against their own interests. Why? Because morality is central to identity, and hence trumps policy.

Progressive morality fits a nurturant family: parents are equal, the values are empathy, responsibility for oneself and others, and cooperation. That is taught to children. Parents protect and empower their children, and listen to them. Authority comes through an ethic of excellence and living by what you say, rather than by enforcing rules.

Correspondingly in politics, democracy begins with citizens caring about one another and acting responsibly both for oneself and others. The mechanism by which this is achieved is The Public, through which the government provides resources that make private life and private enterprise possible: roads, bridges and sewers, public education, a justice system, clean water and air, pure food, systems for information, energy and transportation, and protection both for and from the corporate world. No one makes it on his or her own. Private life and private enterprise are not possible without The Public. Freedom does not exist without The Public.

Conservative morality fits the family of the strict father, who is the ultimate authority, defines right and wrong, and rules through punishment. Self-discipline to follow rules and avoid punishment makes one moral, which makes it a matter of individual responsibility alone. You are responsible for yourself and not anyone else, and no one else is responsible for you.

In conservative politics, democracy is seen as providing the maximal liberty to seek one’s self-interest without being responsible for the interests of others. The best people are those who are disciplined enough to be successful. Lack of success implies lack of discipline and character, which means you deserve your poverty. From this perspective, The Public is immoral, taking away incentives for greater discipline and personal success, and even standing in the way of maximizing private success. The truth that The Private depends upon The Public is hidden from this perspective. The Public is to be minimized or eliminated. To conservatives, it’s a moral issue. Continue reading

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A Step Closer to China (in Lead Laced Shoes)

Lead-tainted Kid’s Shoes – Huffington Post

Over 85% of the toys coming into this country for sale are from China, according to the U.S. Dept. of Commerce. More reports today come in about a shipment of children’s shoes from China that contain lead.  Anything with dye or paint in it (ahem, that’s about everything), may contain lead. (Here‘s a reminder why lead is so poisonous, especially to children). You see, China has no rules against including poison in their products. They have no OSHA, they have no unions.

Why should that matter to the US? We are buying and consuming Chinese goods at a breakneck speed, by doing that we are exposing ourselves to whatever residual nastiness may have resulted in the creation of that product – like lead. At the same time, we are supporting and encouraging those businesses and factories that underpay and exploit workers. Foxconn, a factory recently exposed due to it’s involvement with Apple products, was paying many workers less than $17 per day and they were working for 6 days a week without proper overtime. Now that they have been exposed by whisteblowers, they will be raising monthly pay to $400.

Anti union voters of Wisconsin and those that oppose collective bargaining rights must think the Chinese are doing something right. They are hoping to bring this style of exploitative labor to the U.S. Continue reading

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Sharing our Marbles

How to Get the Rich to Share The Marbles is the title of an article by Johnathan Haidt, psychology professor, printed in the New York Times in February. It explains the psychology around “sharing the spoils” behavior. I’m jumping right to the punch with this quote from the article, then I’ll work backward explaining how we got here:

If the Democrats really want to get moral psychology working for them, I suggest that they focus less on distributive fairness — which is about whether everyone got what they deserved — and more on procedural fairness—which is about whether honest, open and impartial procedures were used to decide who got what. If there’s a problem with the ultra-rich, it’s not that they have too much wealth, it’s that they bought laws that made it easy for them to gain and keep so much more wealth in recent decades. Continue reading

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