Gar Alperovitz's Blog, page 8

PluralistCommonwealth.org

Together with my colleagues at the Democracy Collaborative, we have assembled what we hope will be a useful resource for activists, scholars, and policy makers trying to come to terms with the system problem: If we know the system is broken, and we want to move beyond both corporate capitalism and state socialism—how do we clarify the nature of a serious alternative?

Over the last decades, I have tried to sketch an answer—or at least a serious point of departure for defining and refining an answer.  The Pluralist Commonwealth is a system anchored in the reconstruction of communities and the democratization of wealth.  It involves plural forms of cooperative and common ownership, and, following the principle of subsidiarity, begins with decentralization and then moves to higher levels of regional and national coordination, but only when necessary. I invite you to visit the new site now; or keep reading to learn more about what you’ll find there.

The site begins with an overview of a few key texts drawn from some four decades of work which present the underlying principles of the model and explain its evolution.

Outlining the major elements of the model alongside relevant texts and excerpts, the site then explains how the Pluralist Commonwealth addresses:

Democratized ownership forms
Local democracy, community culture, and the non-sexist city
Scale and regionalism
Climate change, growth, and the environment
Liberty and reduced work hours
Both planning and markets

Finally, a historical section attempts to put the Pluralist Commonwealth model in context; explaining how struggles against war, poverty, and deindustrialization helped shape the development of this systemic alternative vision.

We intend the site to function as an ongoing, actively growing archive of material related to the Pluralist Commonwealth and related aspects of systemic change. Please visit the site today, share it with friends and colleagues, and let us know if there’s anything we can do to make it more useful.

Visit the site now: PluralistCommonwealth.org

 

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Beyond the Dreamer

Originally published in the January 2014 issue of Sojourners

IN THE LAST YEAR of his life, Martin Luther King Jr. struggled with what are best understood as existential challenges as he began to move toward an ever-more-profound and radical understanding of what would be required to deal with the nation’s domestic and international problems.

The direction he was exploring, I believe, is far more relevant to the realities we now face than many have realized—or have wanted to realize.

I first met King in 1964 at the Democratic Party’s national convention held that year in Atlantic City—the occasion of an historic challenge by the Mississippi Freedom Democratic Party (MFDP) to the racially segregated and reactionary Mississippi Democratic Party. I was then a very young aide working for Sen. Gaylord Nelson of Wisconsin.

Sen. Nelson authorized me to help out in any way I could despite President Lyndon Johnson’s effort to clamp down on the fight for representation in the interest of a “dignified” convention that would nominate him in his own right after his rise to the presidency following President Kennedy’s assassination. Johnson didn’t want a bunch of civil rights activists muddying the waters and, not incidentally, causing him problems in the conservative, race-based Democratic South.

After much back and forth, the Johnson administration offered a “compromise” proposal that the old guard be seated (provided they pledged to support him) and that two at-large representatives of the MFDP also be seated.

Any “compromise” that seated the racist delegates was anathema to the MFDP, many of whose representatives had repeatedly risked their lives in the fight for equality. However, King, who desperately needed Johnson’s help in connection with a broad range of evolving national civil rights issues, proposed accepting the “compromise” after presenting a range of arguments for and against it. The performance was “Hegelian” in its complexity, according to one close witness. “So, being a Negro leader, I want you to take this,” King urged, “but if I were a Mississippi Negro, I would vote against it.”

The MFDP delegates were having none of it. During one meeting King was shouted down, and during another the legendary activist Bob Moses reportedly “tore King up,” declaring: “We’re not here to bring politics to our morality, but to bring morality to our politics.”

My own sympathies were with the MFDP and with the position urged by Moses. Indeed, I went to Mississippi following the convention and toured the state with him—a buttoned up young Senate aide trying to understand the depth of MFDP’s commitment and the deeper source of their radical stance and criticism of King. (We were continuously followed by state troopers; I remember vividly how one patrol car would track any vehicle driven by Moses for hours—especially with a white man alongside in the front seat—and then pass us on to another, endlessly.) I also recall sleeping in isolated rural farm houses, many of which had shotguns at the ready by the door.

The 1964 MFDP event underscores some of the complicated and contradictory pressures King was struggling with—and how he was trying to straddle and compromise in ways he felt appropriate given the national role he was playing at this relatively early moment in the 1960s.

It is also well to remember how strong, indeed vicious, were the ongoing attacks King faced not only from the Right, but from the establishment press. King was routinely and intensely interrogated on his numerous appearances onMeet the Press, perhaps the most important national platform in the pre-internet and pre-cable television era. For instance, an interviewer in 1965 interrogated him about an appearance at the Highlander Folk School: “Dr. King, the AP reported the other day that a picture taken of you in 1957 at a Tennessee interracial school is being plastered all over Alabama billboards with the caption ‘Martin Luther King at a Communist training school.’ Will you tell us whether that was a Communist training school and what you were doing there?” Numerous print journalists were equally relentless. Syndicated columnist Joseph Alsop, for example, charged that “[Communist] agents are beginning to infiltrate certain sectors of the Negro civil rights movement … The subject of the real head-shaking is the Rev. Martin Luther King … [H]e has accepted and is almost certainly still accepting Communist advice.”

My second encounter with King involved his opposition to the Vietnam War, something he did not express publicly for a substantial period. He began to speak out against some of the most egregious aspects of the war as early as 1965 when, in an address to the Southern Christian Leadership Conference, he called for an end to U.S. bombing—and ran into opposition from his primary political base.

Many religious leaders of the more traditional parts of the civil rights movement strongly believed that any challenge to Johnson and the war would burden the movement with far more than it could sustain. King’s own organization, the SCLC, disassociated itself from his position by adopting a resolution carefully confining the organization’s actions to the “question of racial brotherhood.”

It was a Ramparts magazine report in early 1967 with many photos of Vietnamese children who had been the victims of U.S. napalm bombing that pushed King over the edge about the war. “He froze as he looked at the pictures,” his assistant Bernard Lee recalled. “He saw a picture of a Vietnamese mother holding her dead baby, a baby killed by our military … That’s when the decision was made.”

King’s thunderous challenge to the war and the Johnson administration came in a now-famous Riverside Church speech on April 4, 1967—and the language was no longer “Hegelian.” Indeed the contrast between the King I met in Atlantic City three years before and the King of Riverside Church could not have been starker.

In the Riverside speech, King brought the question of violence by angry black activists into a new and highly controversial focus. “I knew that I could never again raise my voice against the violence of the oppressed in the ghettos,” King said, “without having first spoken clearly to the greatest purveyor of violence in the world today—my own government.” He continued, “These are revolutionary times. All over the globe [people] are revolting against old systems of exploitation and oppression … We in the West must support these revolutions.”

Such words clearly needed to be followed by action—and very shortly after the speech King came to Cambridge, Mass., along with Dr. Benjamin Spock, to help launch an activist effort against the war that I had helped create called “Vietnam Summer.” Then a Fellow of the Institute of Politics at Harvard, I spent a number of hours driving with him to Cambridge, introduced him and Spock at a press conference launching the effort, and then accompanied King, Spock, and a large group of activists as they began a doorbell-ringing campaign to get people involved in anti-war actions that ranged from middle class petition signing to “Hell No We Won’t Go” draft-card burning rallies. The King of 1967 was calm and resolute, a very different man from the careful and cautious King I had met in 1964.

Found in his pocket after the assassination in Memphis was a list of “10 Commandments” he planned to use in a speech to a large anti-war rally in New York on April 27, 1968. Perhaps the most important for our own time: “Thou shalt not believe in a military victory. Thou shalt not believe that the generals know best. Thou shalt not believe that the world supports the United States. Thou shalt not kill.”

He was assassinated a year to the day after his Riverside Church speech.

SHORTLY AFTER THE launch of Vietnam Summer, at King’s request, I met with him and his assistants Andrew Young and Bernard Lee to sketch out strategies to create new community-wide, democratically owned economic institutions that might also begin to build political power. King’s interest in these strategies was a harbinger of a larger, more complicated direction that was clearly evolving in his own mind.

Here was a man—especially in the last years of his life—who clearly was thinking not simply about new programs and policies, but about what can only be called changing the system. “True compassion is more than flinging a coin to a beggar,” King said. “It comes to see that an edifice which produces beggars needs restructuring.”

On another occasion, King said, “One day we must ask the question, ‘Why are there 40 million poor people in America?’ And when you begin to ask that question, you are raising questions about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy and to ask questions about the whole society.” Elsewhere he added, “Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”

What King meant by “democratic socialism” or a something beyond capitalism is clearly ambiguous—and his evolving thoughts on the issue were tragically cut short. Some believe he had in mind something like the Swedish welfare state he found so laudable when he traveled to Stockholm to receive the Nobel Prize. My own sense is that his repeated statements point in the direction of something more profound—a democratic form of system-wide change corresponding to the broad, participatory vision he affirmed, a system beyond both traditional capitalism and traditional socialism that hopefully one day may come into clearer focus and definition.

Martin Luther King Jr. was a great civil rights leader, but to remember him only in this way is to diminish what he was about and what we can learn from him. What stands out—as lessons for our own day and to each of us now—is his growing understanding of the importance of confronting ever-more-fundamental issues, even in the face of challenges from the press, the establishment, and his own religious constituency, to say nothing of those on the Right.

It is well to honor the vision he offered of one day achieving a society beyond racism, but even more important to consider his own struggle and the larger trajectory of thought and action he seemed to be exploring. It is a trajectory that points to a very different role for the U.S. in the world, and one that looks to fundamental, far-reaching systemic change to honor her ideals, no matter how difficult to achieve or how long the task.

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Part 2 of my conversation with Peter Buffett: “If you don’t have a way to speak to ordinary Americans, you’re not in the game.”

Picking up where the short introductory excerpt left off, this next segment from our long conversation finds Peter Buffett and myself discussing the influence that growing up Midwestern had on both of us, and how these early experiences of community have shaped—for the better (we hope)!—the way we each try to talk about systemic challenges and solutions.

Download this segment

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Part 2 of my conversation with Peter Buffet: “If you don’t have a way to speak to ordinary Americans, you’re not in the game.”

Picking up where the short introductory excerpt left off, this next segment from our long conversation finds Peter Buffett and myself discussing the influence that growing up Midwestern had on both of us, and how these early experiences of community have shaped—for the better (we hope)!—the way we each try to talk about systemic challenges and solutions.

Download this segment

The post Part 2 of my conversation with Peter Buffet: “If you don’t have a way to speak to ordinary Americans, you’re not in the game.” appeared first on Gar Alperovitz.

The Real News Network

All five parts of my long interview with The Real News Network’s Paul Jay are now online:

Part One: “Understanding the Imperialist System Changed My Life” (video & transcript)

Part Two: “Nuclear Attack on Japan was Opposed by American Military Leadership” (video & transcript)

 

Part Three: “Capitalism in Long Term Stagnation and Decay” (video & transcript)

 

Part Four: “The Promise and Limitations of Worker Cooperatives” (video & transcript)

 

Part Five: “What Would You Do If You Had Political Power?” (video & transcript)

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The Real News Network (Part 1 of 5)

The first part of my long interview with The Real News Network’s Paul Jay is now online:

Read the transcript here

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A preview of my conversation with Peter Buffett

The following segment is an excerpt and preview of a conversation that took place between myself and Peter Buffett: composer, chairman of the NOVO Foundation, and son of investor Warren Buffett. Peter’s op-ed last year in the New York Times on the “charitable industrial complex”—retweeted over 8000 times and liked and shared by over a hundred thousand people on Facebook—was not only a stunning and unexpected indictment of the philanthropic status quo, but a bold call to imagine a new economy. This latter aspect—Peter’s demand for, as he put it, “concepts that shatter current structures and systems that have turned much of the world into one vast market”—led to the conversation excerpted here, when I sat down with Peter at the close of 2013 for a discussion of systemic crisis and the possibility of hope. The full conversation will appear soon.

Download this segment

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Debating public ownership of too big to regulate banks in the New York Times

The New York Times’ Room For Debate recently featured an exchange around the question Are Big Banks Out of Control?  My contribution to the debate follows (originally posted here):

Nationalize Banks That Overwhelm Regulation

The announcement of a settlement with JPMorgan Chase in connection with the Bernie Madoff Ponzi scheme brings into focus one of the most important, if unexpected, strategic ideas of the early, highly conservative Chicago School of Economics. The key judgment: Contrary to the conventional wisdom calling for stronger regulation, a number of early conservative economists held that some institutions were simply too big and too powerful to regulate. They would always find a way around government efforts to keep them in line in connection with certain critical economic issues. George Stigler, for one, received a Nobel Prize for illuminating the institutional power relations involved in what is commonly referred to as “regulatory capture” — the informal way in which regulations always get watered down sufficiently so that somehow things tend to slip through the cracks.

If regulation was likely to fail to solve problems like those involved in the Madoff scheme, what then might be done with very large institutions? An alternative — now being urged by several Senators is that very large institutions be broken up. The problem here, a number of the Chicago School leaders pointed out, was that the anti-trust process was also commonly taken over by the large institutions. Milton Friedman later came to the same basic judgment. Furthermore, once broken up, significant institutions have a way of reconsolidating power, and are commonly soon back operating at the same scale or larger (as anti-trust efforts in connection with Standard Oil and AT&T also demonstrate.)

Friedman’s revered teacher H.C. Simons, one of the most important leaders of the Chicago School, faced the dilemma squarely very early on: In cases where neither regulation nor breaking up large entities offered a genuine solution, he argued, “in general…the state should face the necessity of actually taking over, owning, and managing directly…industries in which it is impossible to maintain effectively competitive conditions.”

The essential logic of the Chicago School position is demanding but almost certainly correct, as anyone who has watched how large banks and major corporations work the lobbying process in Washington knows. Clearly, however, to achieve the recommended solution would probably take at least another Madoff failure, and one or more larger financial crises — and would likely be possible after the break-them-up half-way option also failed to offer a solution and public anger could not be managed in any other way.

 

 

 

Read the whole debate: Are Big Banks Out of Control?

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10 Steps You Can Take to Democratize Your Community

An interview with Abby Martin of Breaking the Set about my recent article “What Then Can I Do?” highlighting strategic organizing opportunities for building a new economy:

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Mondragón and the System Problem

(with Thomas Hanna, originally published at Truthout)

As America moves more deeply into its growing systemic crisis, it is becoming increasingly important for activists and theorists to distinguish clearly between important projects and “institutional elements,” on the one hand, and systemic change and systemic design, on the other. The recent economic failure of one of the most important units of the Mondragón cooperatives offers an opportunity to clarify the issue and begin to think more clearly about our own strategy in the United States.

Mondragón Corporation is an extraordinary 80,000-person grouping of worker-owned cooperatives based in Spain’s Basque region that is teaching the world how to move the ideas of worker-ownership and cooperation into high gear and large scale. The first Mondragón cooperatives date from the mid-1950s, and the overall effort has evolved over the years into a federation of 110 cooperatives, 147 subsidiary companies, eight foundations and a benefit society with total assets of 35.8 billion euros and total revenues of 14 billion euros.

Each year, it also teaches some 10,000 students in its education centers and has roughly 2,000 researchers working at 15 research centers, the University of Mondragón, and within its industrial cooperatives. It also actively educates its workers about cooperatives’ principles, with around 3,000 people a year participating in its Cooperative Training program and 400 in its Leadership and Team Work program.

Mondragón has been justly cited as a leading example of what can be done through cooperative organization. It has evolved a highly participatory decision-making structure, and a top-to-bottom compensation structure in a highly advanced economic institution that challenges economic practices throughout the corporate capitalist world: In the vast majority of its cooperatives, the ratio of compensation between top executives and the lowest-paid members is between three to one and six to one; in a few of the larger cooperatives it can be as high as around nine to one. Comparable private corporations often operate with top-to-median compensation ratios of 250 to one or 300 to one or higher.

Although it has been criticized for violating its cooperative principles through somewhat “imperial” control of some of its foreign operations, for its use of non-cooperative labor, and for a less-than-active concern with environmental problems, in recent years Mondragón has begun to address deficiencies in these areas.

Bankruptcy for Fagor Electrodomésticos

Mondragón Corporation’s historically most important unit is Fagor Electrodomésticos Group, which makes consumer appliances – “white goods” such as dishwashers, cookers and other related household items. It is the fifth-largest manufacturer of such products in Europe. It employs roughly 2,000 people in five factories in the Basque region and has and additional 3,500 in eight factories in France, China, Poland and Morocco. Its direct predecessor (ULGOR) was the first-ever Mondragón cooperative – established in 1956 by five young students of José María Arizmendiarrieta, the spiritual founder of Mondragón cooperative network.

Mondragón recently announced that Fagor was failing and that the company would be filing for bankruptcy protection. Ultimately, Fagor was unable to find financing to pay off debts of around $1.5 billion related to a 37 percent slump in sales since 2007 that resulted from Spain’s economic crisis and housing market collapse. Under Spanish law, the company now has four months to negotiate with its creditors – which include the Basque government, banks and others – and formulate a restructuring plan.

As part of any restructuring or liquidation, Mondragón will provide jobs and income security for a certain period for some its workers in Spain. This is one of the cooperative network’s great advantages. It has announced that its internal insurance company Lagun Aro will pay 80 percent of the cooperative member’s salaries for two years and the corporation will strive to relocate as many employees as possible to other cooperatives in the network.

The fate of the roughly 3,500 non-Spanish wage laborers (i.e. not cooperative members) in other countries, however, is unclear.

Some Specific Problems

Given its importance, we are certain to see any number of economic reports on the specific problems that created the failure of Fagor. The larger questions posed by the failure, however, are the relationship of large-scale economic institutions to the market in any system, and the lessons for long-term systemic design for people concerned with moving beyond the failings of corporate capitalism and traditional socialism.

Mondragón itself, and proposals for systemic change based on larger-scale cooperatives in general, have only occasionally directly confronted some of the larger challenges that the market poses to cooperative institutional forms. Mondragón’s primary emphasis has been on effective and efficient competition. But what do you do when you are up against a global economic recession, on the one hand, or radical cost challenges from Chinese and other low-cost producers, on the other?

The same challenges face anyone who hopes to project a new system based on cooperative ownership in any country. There is nothing inherently wrong with such a system; far from it, the principle is one to be advanced and supported. The question of interest, however – and especially to the degree we begin to face the question of what to do about larger industry – is whether trusting in open market competition is a sufficient answer to the problem of longer-term systemic design.

The Fagor failure is a strong reminder that ignoring the question can have consequences.

The specific problems are obvious: The first has to do with whether any system allows the global market to set the terms of reference for the economy in general and specific (larger scale) firms structured along cooperative lines in particular. A serious “next stage” systemic design almost certainly will have to adopt one or another form of “planned trade” rather than “free market trade” – else the fate of specific firms, and specific groups of workers, and also the communities in which both exist, become subject to the ever-intensifying challenges as corporations play one low-wage country off against another, with the destruction of wage standards and firms (cooperative or otherwise) the inevitable result.

The second challenge takes us beyond the question of planning in connection with trade to planning in connection with the domestic market: It was never the goal of the Mondragón Corporation to seek a planning solution to the problems of the Spanish economy. Nor was “changing the system” part and parcel of its primary mission. It always sought to compete successfully in the existing system, at the same time demonstrating a superior form of internal organization. Americans concerned about fundamental, longer-term change need to ponder this particular point carefully. The challenge any system-changing vision presents is at least twofold: First, how to include new models of cooperative organization in a larger strategy that includes managing (and restructuring) the wider economy in its goals; second, how to begin to think through much more carefully issues of sectoral planning within larger democratic or participatory planning goals.

Almost certainly many smaller-scale cooperatives can succeed, if carefully managed, in small markets. But moving to scale – as Fagor did in entering the global market for appliances – means that the fate of the institution also rests on the fate of the larger market, and on competition within that market, whether global, as in the case of Fagor, or domestic, as in the case of many other industries.

Space does not permit a full discussion of how participatory planning might be achieved to deal with large-scale unemployment, and economic management in general – two of the severe challenges that have crippled economic development in Spain and contributed to Fagor’s problems. However, some of the key questions and possibilities for beginning to think through sectoral planning as part of a larger approach are suggested by considering how one significant scale industrial sector might be dealt with.

A good reference point is the auto industry in the United States. Assume, for the moment that the auto industry were to adopt new forms of worker or worker-community ownership structures. (One somewhat limited form of this, by the way, actually occurred during the recent Great Recession in 2009, when the government and autoworkers’ employee health care benefit fund assumed ownership shares in Chrysler and General Motors.) The question in the future is how might we utilize worker and community ownership more effectively and move beyond seeing the companies narrowly (like Fagor) operating in a capitalist sea and market system?

One important point: A viable alternative systemic/planning solution likely would extend the reach of these companies far beyond selling cars. Such a solution might, for instance, involve developing a long-term national investment plan to invest in worker and community-owned transportation companies in order to shift spending from cars to more efficient high-speed rail and mass transit.

Work published by the Democracy Collaborative in 2010 helps clarify how this might be done: Three alternative scenarios for how population growth to 2050 might be distributed between cities and suburbs were analyzed. The data showed that even the smallest shift in population patterns requires dramatic changes in intra-city and inter-city transportation, both to absorb the anticipated increase in population and to achieve necessary reductions in carbon emissions. All three options would require major expansion of local public transportation, at an annual cost of at least $240 billion – $140 billion for increased operating costs and $100 billion for capital spending.

Additionally, the number of long-distance trips traveled by airplanes (the worst form of transportation from a carbon emissions standpoint) and cars would have to be reduced and replaced with high-speed rail. A good benchmark for costs on this – $2 trillion over 15 years for 25,000 kilometers of high-speed track – was put forward by Canadian analysts Richard Gilbert and Anthony Perl.

In turn, expenditures under this “plan” would be targeted to place-based economic development strategies around economic institutions structured either as worker-cooperatives or, following new models emerging in Cleveland and other cities, around joint community-worker cooperative structures.

Time to Get Serious

The details of any serious democratic “planning system” inevitably would change as greater sophistication and knowledge are developed – and as noted, in the above example, we looked only at one sector, rather than the larger system as a whole. Also, any larger-scale, system-changing planning effort likely would utilize direct planning as well as carefully managed markets in defined areas. The critical point from the perspective of our immediate concern is that it is time for activists and analysts who hope to build upon principles of cooperative worker ownership or joint cooperative-community ownership for larger-scale firms to get serious about the larger systemic planning issues involved.

The fate of Fagor – and the future of many other cooperatives now attempting to compete at higher levels – suggests that if “the system question” is not addressed in theory and in practice, and in sophisticated longer-term design, many of the hopes generated by even so brilliant an experiment as Mondragón may be thwarted by forces more powerful than any one element in a system can handle alone.