On June 23, 2015, Matt Standard writes on Occupy.com:
Many now agree that corporate capitalism needs to go away. But we differ about the methods of replacing it. Over the past few years, entrepreneurs have risen in defense of the commons, and suggested new means of economic exchange based on more fluid conceptions of distribution. These advocates call their vision the “sharing economy.” This vision is primarily centered on the distribution and re-use of our excess – both our extra stuff and our extra labor power.
But critics say this solution doesn’t go far enough. Writing last year for Jacobin, Tom Slee accused advocates of the “sharing economy” of blindness to the displacing and insecuritizing effects of their sales pitch. By invoking lefty-earthy symbols of “decentralization, sustainability, community-level connectedness, and opposition to hierarchical and rigid regulatory regimes,” proponents of the sharing economy appeal to “anti-consumerist sentiments” but do nothing to actually change material relations.
In fact, Slee argued, they do worse than nothing, because they encourage an economy of displaced and temporary workers who can no longer take advantage of even the minimal protections gained through regulations and organizing. Sharing is good, but sharing doesn’t fundamentally alter material relations.
Innosanto Nagara, a graphic designer and co-founder of Design Action Collective in Oakland, and a longtime participant in worker-owned cooperatives, revealed these stark differences. In a recent interview, Nagara didn’t pull any punches. “What is being referred to as the ‘sharing economy’ these days is really just more capitalism,” he told me.
Advocates of worker-owned cooperatives concentrate primarily on changing relations of production rather than simply reconfiguring distribution. Labor cooperatives have existed for centuries and, as many authors have recently pointed out, have been an integral – if often erased – part of the American experience. According to economist Richard Wolff, cooperatives offer a genuine alternative to traditional capitalism’s hierarchical dichotomy between owner and worker – something the sharing economy neither challenges nor alters.
“All the workers,” says Wolff, “whatever they do inside an enterprise, have to be able to participate in collectively arriving at the decisions what, how, where to produce, and what to do with the profits in a democratic way.”
Worker-owned cooperatives democratize economic decision-making at the level of production. And so the operative terms are different. Instead of a “sharing economy,” those in the worker-owned cooperatives movement advocate a solidarity economy. In his article on Oakland-based worker cooperatives, Eric James Anderson writes: “’Solidarity economy’ is an international term that has only just been gaining favor in the United States in the last ten years. Though the term denotes a variety of social justice enterprises and endeavors, it differs importantly from the nonprofit model in that it promotes collaborative self-reliance, as opposed to grant funding.”
Further explaining the difference, Al Jazeera reporter Ned Resnikoff writes: “Whereas there is little in practice to distinguish sharing economy businesses like Airbnb and Uber from other top-down firms, [worker cooperatives] are founded on the principle of equal work for an equal share.”
Recently, such cooperatives have emerged in California’s technology industry. Firms like Tech Collective and Design Action Collective offer the services the technology industry needs, but their decisions regarding production, distribution, employee policies, and long-term vision are made by the workers rather than investors or aloof CEOs. The workers, who are closer to the everydayness of working life, see things differently than the purveyors of investment capital.
The specific ways in which that vision differs from traditional capitalism was the subject of my brief interview with Nagara, in which we discussed sharing versus solidarity, capitalism versus worker management, and the very important internal cultural transformation garnered by worker ownership:
Matt Stannard: What are the essential differences between the “sharing economy” and a solidarity economy?
Innosanto Nagara: I understand that at the grassroots level, the “sharing economy” can be something appealing to folks who are about building community and reducing waste. But what is now being referred to as the sharing economy is actually just “hip” companies trying to do an end-run around health and safety regulations, labor laws, and accessibility standards. Uber, AirBnB, Lyft, etc. are not about sharing anything. For some reason they think that the fact that they use an app as an interface for placing orders means that they are exempt from all the regulations that communities have fought for years to put into place to ensure safe and equitable operations (taxi services, hotel service, etc.).
So I don’t really understand what it has to do with anything progressive. The solidarity economy is about building institutions that engage in economic activities that bolster community health, prosperity, and sustainability. It’s a response to the capitalist economy that thrives only through consolidation of wealth-generating methods into the hands of the greediest (private ownership of means of production). As well as the state-centralized models that don’t thrive. What is being referred to as the “sharing economy” these days is really just more capitalism.
MS: What values and ethical beliefs emerge from working in a cooperative? How does it change (or perhaps reinforce) your assumptions about human nature?
IN: Worker ownership is about alienation versus empowerment. For human beings to be able to be their full selves, they need to have a say in the affairs that affect their lives. We believe this to be true (whether we successfully implement it or not) when it comes to democratic governance. But for some reason we’re meant to think it’s okay to check our voices at the door every day when we arrive at work. How can we live in a democratic society when most working people spend the majority of their waking lives in what Chomsky refers to as “private tyrannies”?
Those working in democratic organizations learn to value themselves, as well as the products of their labor and the communities that they live in. Having worked in worker coops now for 20 years, I have seen so many people go from worker bee to leader within their organizations. It gives you a very positive view of human nature, when properly nurtured.
MS: I’m interested in the point in the Al Jazeera article about the presence of women and people of color in tech cooperatives, as compared to traditional capitalist enterprises. What are your thoughts about this?
IN: Traditional capitalist enterprises have a very narrow margin for success, and as such are very conservative and reflect the values, cultures and biases of those who have traditionally accumulated wealth and power in this country. They don’t succeed because they are great. They make it because those who have accumulated wealth before them, and those before them going back to slavery and colonialism, gamble on them.
Tech coops aren’t inherently more diverse, but they are a model that women and people of color can access to create their own. The model is appealing to women and people of color because the values align with those needed in broader struggles for social justice and equality. Basically, those who are less able to access capital are more likely to figure out how to pool resources and skills. And when everyone is contributing, what’s the justification for artificial hierarchies?
MS: Are there challenges or problems found in cooperative work that might not be found in traditional firms?
IN: The main internal challenge coops face is also one of their main strengths, which is that they tend to be more deliberative and as such less agile. But what makes traditional firms agile is the reliance on one person (the owner) to make quick and brash course changes as he (usually a he) sees fit. That agility, when paired with the thrill of the chase allows for higher risk gambling, which sometimes pays off. Established coops are not as good at high stakes gambling, and sometimes go over the edge on the other side–being unable to shift at all in the face of adversity. But on the aggregate, the accumulation of better decisions over time is probably they key reason why coops also have a higher success rate compared to the constant cycle of entrepreneurial startups.
Externally, coops face the challenge of being disfavored by the system. The system is built to favor large corporations, and the degree to which there is investment in small to mid-sized businesses (where coops tend to live) there are many barriers to accessing resources if you’re not that charismatic entrepreneur with traditional equity to offer. Most states don’t even have a clear way for worker coops to incorporate, and tax law, bank requirements, development incentives, etc. all fail to recognize worker coops as a model, much less invest in them the way they do, say, franchise businesses.
James Madison warned that inequality in property ownership would subvert liberty, either through opposition to wealth (a war of labor against capital) or “by an oligarchy founded on corruption” through which the wealthy dominate political decision-making (a war of capital against labor).
What, if anything, can the U.S. do to reverse the pattern and to assure that in the next three decades, all of us share in the benefits of modern technology and economic progress? What is the best way to avoid Madison’s dark scenarios?
The best way to address the problem of the huge concentration of capital ownership and capital income is to ensure that every economic policy is aimed at broadening wealth-creating, income-producing capital ownership among individual children, women and men.
The strategy needs to expand capital ownership and capital income for propertyless (capital) citizens through programs that encourage broad-based employee stock ownership of firms (such as the Employee Stock Ownership Plan ESOP structure), widely available profit-sharing, and all-employee stock options and stock grants in firms that now restrict ownership, stock options and bonuses to only the highest-level executives.
With workers holding ownership shares in the companies they work for, corporate America’s overall economic performance would be greatly improved as tens of million more citizen capitalists begin to focus their efforts on improving company performance.
Our democracy would work best if EVERY child, woman, and man had a broad-based ownership stake in the economy.
Citizen ownership is not a new idea in America. Under President Abraham Lincoln, Congress enacted the Homestead Act of 1862, which gave 600,000 citizens access to about 100 million acres of land in 160-acre plots if they lived on the land and improved it.
In 1956, the Employee Stock Ownership Plan (ESOP) was invented by economist and corporate lawyer Louis O. Kelso as a way for the workers to gain ownership shares in the companies they work for or to buy out their owners. In 1974, as part of the Employee Retirement Savings Act (ERISA), Congress instituted tax incentives for corporations to grant workers shares of stock.
The agenda for the Just Third Way sketches out specific policies that can encourage broad citizen ownership of capital through greater employee stock ownership and stock ownership by others not employed in the private sector or not employed at all. Such stock ownership can be acquired using financial mechanisms structured with insured, interest-free capital credit, repayable out of the FUTURE earnings of the investments, without the need for past savings or reductions in wages or benefits. The proposed Capital Homestead Act shows how private companies can develop innovative ways to increase ownership by their employees and how government can use taxes and other policies to better incentivize corporations to consider ownership-broading plans or to expand current plans. Restructuring the tax code should include provisions to broaden the citizens’ share of the country’s business stock simultaneously with the growth of the economy, without taking coercively from those who already own.
If we do not embrace universal individual ownership of productive capital assets formed to grow the economy, then we will continue to be wage slaves, welfare slaves and charity slaves of those who monopolize wealth-creating, income-producing capital asset ownership. Essentially, it posses two paths, either OWN the Future Economy or BE OWNED.
Unfortunately, we never hear politicians or the wealthy address this solution, with the present exception of Senator Bernie Sanders, who is a Democratic Party candidate for the 2016 presidency. Sanders is the ONLY candidate that delves into economic inequality and advocates for worker ownership and Employee Stock Ownership Plan (ESOP) corporate structures.
To learn more about the solutions that will result in inclusive prosperity, inclusive opportunity, and inclusive economic justice see the following references:
“Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.org/11/economic-justice/
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
See “The Just Third Way Concept” at http://www.cesj.org/learn/just-third-way/graphic-overview-intropage/
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/. See http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.
Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.
Free E-Books Download: “The Capitalist Manifesto” at http://www.kelsoinstitute.org/pdf/cm-entire.pdf and “The New Capitalists––A Proposal To Free Economic Growth From The Slavery Of [Past] Savings” at http://www.kelsoinstitute.org/pdf/nc-entire.pdf
“Two Factory Theory––The Economics Of Reality” (Louis O. Kelso & Patricia Hetter Kelso)
“Binary Economics––The New Paradigm” (Robert Ashford & Rodney Shakespeare)
