This blog started out as a companion piece to my book, Musings from the Christian Left (excerpts of which can be found in the July 2004 link) and to support a planned radio show. Now, its simply a long term writing project from a Christian Left Libertarian perspective (meaning I often argue for liberty within the (Catholic) Church, rather than liberty because the church takes care of a conservative view of morality.

Friday, October 20, 2017

Revolution in Rojava: Democratic Autonomy and Women's Liberation in the Syrian Kurdistan by Michael Knapp

Revolution in Rojava: Democratic Autonomy and Women's Liberation in the Syrian Kurdistan

This is essential reading if you want to know what is really going on in Syria, especially what the media won't cover, and how bad an actor both Turkey and the Iraqi Kurds have become.  This is a socialist experiment that might just work unless murdered from the outside.  They are the essential players and their example could bring an end to the conflict, even with agnosticism on Assad being removed (as long as he respects local autonomy).

Sunday, October 15, 2017

Controlling the Means

In September, I was the guest speaker at the DC Metro Chapter of Democracy@Work, or D@W, which seeks to do community efforts to bring Richard Wolff’s book into action. Before my talk, I wrote the usual definition of socialism on the white board.

Workers control the means of production.

I then wrote the words Bureaucrats, and Capitalists above the word workers, voters below the word workers and the words consumption and government above the word production. Like this:

Workers control the means of production/consumption/government

Most good comrades could explain this diagram rather well, but I will repeat what I said, with a few additions. I noted that while we want workers to control the means of production, we are stuck in capitalism, where capitalists control both the means of production and the means of consumption, both through monopolistic pricing and by holding down wages, which deprives workers of all they deserve to consume. Capitalists also control the means of government, mostly by controlling voters through campaign ads and funding wedge issues, like abortion and gay rights. This assures that the Capitalists control the Workers.

By Bureaucrats, I meant party officials in state socialisms, who control government, consumption and production, was well as the workers and voters, with no union rights or alternative candidates. When Bureaucrats control the means of consumption, they get the best stuff and when they don’t deliver consumer goods, nothing happens to them. Bureaucratic control was essentially control by gentry, which sounds like feudalism to me.

Neo-liberalism is capitalism with better stuff and more of it, especially if the neo-liberals remember how Keynesianism works. Democratic Socialsim has much better stuff and better government and there may even be quality circles at work or an ESOP to give the illusion of control over the means or production, but there is still something missing, which is sometimes even more annoying than straight capitalism.

Socialism happens when workers first control the means of consumption, which makes make v. buy decisions on production really easy. Workes can make the same choices about government in house health care v. purchased or government healthcare, or education, or infrastructure, or housing or food. More important is the choice between exernal finance with interest or cooperative finance with less profit. Most important is the question of management: meritocracy, election or lowest bidder, from foreman to CEO. Making that last choice apparent will cost me clients. 

Other options to consider are providing housing to younger workers near the workplace, higher pay v. free cafeteria for breakfast, lunch, clothing, cooperative markets, how to deal with multi-national workers and supply chains (absorb them silly comrades). 

As voters we decide whether to support a Mars mission (instead of weapons) which will surely yield habitat technology that comrades can use to grow their own food to work shorter days and fewer years (with less cash). Most importantly, do we want to borrow money to buy out the capitalists or divert Social Security employer contributions to worker ownership and control, or maybe both. There is lots more to consider, but you get the idea. We can grow as big as we want and the bigger we go, the more we control the means of production and consumption, especially if we control the profits (instead of the capitalists doing so). Workers currently chose money over group consumption and more control over production, even if they only do so implicitly and they have no access to the profits unless they borrow them back on credit and take slavery to a whole new level, like in the 2000s. That is also why higher taxes are better than selling bonds to rich people. How is this not obvious, even to the neo-libs?

I am available to give this talk anywhere desired, optimally where duck is served.

Saturday, October 14, 2017

The Cooperative Solution by E.G. Nadeau

This is a good primer on cooperatives, why we need them and where they are going. This book was written in 2012. I picked it up in 2015 and am writing this in 2017, so there have been some changes, at least in the overall economy and certainly in the politics. Richard Wolff’s Democracy at Work came out the same year, with Gar Alperovitz’s What Then Must We Do came out the following year. Both covered some of the same ground and were a bit more radical, with Gar being closer than Richard to E.G.’s book, although Gar covered more ground.

2012 was the International Year of the Cooperative. E.G. lists the seven principles of what a cooperative is, including voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information, cooperation among cooperatives and concerns for the community. They have come a long way since my great-grandfather, Silas Locke Allen, helped organize a little farmer’s cooperative in southern Minnesota that has now set the standard in butter production. Of course, because it was a cooperative, I was born with zero Land O Lakes stock. Had I been, I would have expanded the cooperative to include the factory workers, local construction companies, gardeners, county road builders and local schools across the Midwest and probably part ownership in John Deere. More about that later.

E.G. highlights the problems of concentrated economic power in the U.S. It is incompatible with political and economic decision-making. We have had 237 years on an economic roller-coaster, largely because of capitalism and its boom-bust cycles. This gave us the Occupy Wall Street Movement (which commented on financial wealth issues well after it left the park, producing detained comments on Dodd-Frank reforms). Capitalist with political power give us cornered markets, insider trading, collusion, monopolies and oligopolies, misrepresenting the value of an investment or purchase, high-margin investing, unrealistic expectations and fraud. Five years after this book went to print, little has been done to bring individuals to justice who engaged in these activities most recently, save some obvious bad actors. Cooperatives don’t engage in such nonsense on a regular basis. Is big business a better innovator? E.G. sites examples where big firms held back innovations to avoid market disruption, and by disruption we mean their ability to control it.

E.G. focuses on the Great Recession and how it was caused by the financial sector demanding so many loans that bad ones were rated as AAA. I would add that NYMEX oil futures markets were artificially bid up (which Dodd-Frank now prevents, at least until Trump guts the implementing regulations) and when the Congress intervened, the prices crashed, leading traders to sell housing securities to cover their positions, which showed how bad those bonds really were, crashing the economy. The aftermath was high unemployment, loss of savings, loss of homes and underwater mortgages, and insecurity. In the five years since then, these conditions are no longer the case, although give Trump time to ruin things again.

We do know a bit more now about how tax and deficit policy is a causal factor than we did in 1789. If taxes are too low without a big deficit sucking up the excess saving, we get economic booms, low wages, accommodating monetary policy and recessions, according to my research. The passage of the American Tax Relief Act of 2013 made the tax cuts for the working and professional classes (called the middle class by those who believe in economic unicorns) enacted by George W. Bush permanent while increasing taxes on the top 2%, while at the same time imposing additional taxes on the same households as part of the Affordable Care Act (the latter being what the GOP most wanted to repeal). These cuts forced money out of savings and into government purchases and transfer payments, i.e. private consumption, which led to the current slow and steady growth. Without these tax increases, the stagnation E.G. reported would have likely continued to the present day. What does this have to do with cooperatives? In a cooperative economy, rich capitalists who seek low tax rates to enhance rent seeking at the expense of their employees and excess savings to invest in speculative crap simply won’t be a factor.

Wealth and inequality are out of control. E.G. lists data on who owns what, who gets what income, income decline and poverty. While some of these numbers have improved with recovery, wealth concentration is getting worse. It has been since the 1970s. Gold bugs will say that is because we went off the gold standard. It is more likely that this because we have been fighting to control inflation since then and workers have borne the brunt of it, from restrictive monetary policy to tax cuts that encouraged lower wages to union busting for the same reason. Cooperatives don’t generally bust unions and shame on those who do.

The current environmental crisis, where California is burning after drought and Puerto Rico, Houston, Texas, Central Florida and the U.S. Virgin Islands, among others, have been hit with the worst hurricane season in years, is particularly apparent as I write this. Coal barons Charles and David Koch have funded an industry of climate change deniers and, ironically, E.G. quotes then Exxon (now Exxon Mobil) CEO Rex Tillerson, now our Secretary of State (who recently called his boss a moron) denying the seriousness of climate change. (I am glad I waited to write the review on a book I finished two years ago). E.G. asks if we can trust these people to do the right thing on climate change? The answer is obvious.

E.G. calls for moving to a fairer, more secure economic system. We have done so before, moving from the days of the Trusts to the Sherman Act, the break-up of Standard Oil (which is partly back together, oops), the Federal Reserve Act (which the MMT folks don’t like) and the progressive Constitutional Amendments on Income Tax, Senatorial Selection, Prohibition (oops again) and women voting. We can do it again on economic democracy. Indeed, we already are.

Chapter 2 talks about the various types of cooperatives. There are consumer co-ops, producer co-ops, employee-owned co-ops, co-ops of businesses and other organizations and multi-stakeholder cooperatives (like a store owned by employees and shoppers). Cooperatives employ just under one million workers. That includes, however, one third of the agricultural sector (which is declining in labor), largely due to the Farm Bureau Federation and one of its founders, my great-grandfather). The bulk of the chapter, and the book, describes the various sectors where cooperatives currently operate, which does not say they cannot expand into other industries.

I will list them and you can buy the book for more information: mutual insurance, agriculture, cooperative finance (they literally lend to co-ops), credit unions, rural energy, cooperatives of small businesses (like farms and drug stores), social service organizations, housing cooperatives¬¬ (especially New York City), Grocery, food and other consumer goods like REI, and 300 or so worker cooperatives (as well as Mondragon, ESOPs). 

Why have these cooperatives succeeded? The same reason other businesses do: market niche (unmet demand), champions of the model, funding, good management, appropriate business model and committed members. Cooperatives exist because people use them. I suspect I have either shopped at, banked or been employed by almost every type of cooperative on the list above or have relatives who have been. E.G. thinks that regulation of wealth and industry in this century may make cooperatives more likely. Not with this President. Of course, such movements have always been a bit insurgent. We like it that way.

Chapter 3 looks at growth opportunities for cooperatives in 2012 and beyond. E.G. makes some very specific suggestions. On credit unions, he would expand membership of consumers and small businesses, expand small business lending take on the payday lending industry, and let the world know that credit unions are full-service financial institutions. 

I go the opposite direction. I would not only more closely link credit unions to sponsoring organizations, I would absorb them into governmental or employee-owned organizations. In other words, instead of getting a loan from the credit union, the loan is with the ESOP or worker cooperative, both for home and consumer credit. Of course, you could have customer credit unions for food co-ops or car manufacturing and sales, but they must not be instruments of peonage. I would not let capitalists use them as a profit center. Just the opposite. I favor home loans from ESOPs and fully realized employee-owned firms at zero interest. They would also build the homes, which might grow food hydroponically with flicker lights and waste water conversion and storage. Indeed, to build such homes, zero interest rates and cooperative building are essential.

Building such homes would be a huge environmental break-through, although climate change involves alternative energy sources. While homes could make alcohol to fuel cars or have solar panels or windmills to make hydrogen, I am personally betting on fusion. E.G. suggests a few items: mobilizing rural energy cooperatives, sustainable family farm and family forest management (I caution about respecting indigenous people, who deserve their forests back from government mismanagement), increasing energy efficiency in homes and distance from market to table (home grown food is the shortest of all) and renewable energy (burn your own paper, plastic and waste gases for energy).

E.G. suggests revolutionizing social services through co-ops. I would go one further. I would have employee-owned firms pay a subtraction Value-added Tax and be able to take a deduction for providing social and educational services themselves or through a secondary provider, like Catholic Schools and Hospitals. This even includes finding the less than educated and paying them to go to school from literacy to advanced literacy in lieu of taxes for adult education, welfare, food stamps, Medicaid and the like. Firms would also take care of their own retirees, the disabled and addicts and alcoholics who are members or who are related to a member (and no more adopting away kids, whole families should be fostered with pay). Health cooperatives might even have on-site sick and well child day care so that people can come to work more easily, and on-site doctors so you can’t call in sick without being seen.

Cooperatives from farm to table are suggested. Even if people grow some of their own food, they might want to buy lunch or get free breakfast and lunch at work. Employee-owned firms could have their own farms as cooperative or ESOP members, rather than simply cooperating with them. Until Mars mission tech develops home food growing to where it needs to be (a good reason for an aerospace cooperative or ESOP to get funded to do this), the same growers that produce food for the employee-owned or sponsored school and the employee cafeteria might provide it to an employee food cooperative store. The driving force behind such a decision has to be democratic, not just for the food growers but for the customers. No Soviet style shortages or food lines. Workers and members must control the means of consumption, not just production. If someone wants a steak, either get it from a non-cooperative farm or make sure you have adequate steers in the pipeline.

Stressing the mutual in mutual insurance through more democracy is important, with real voting by members rather than proxy voting. This is another case where members control the means of consumption. I would go further. Employee-owned and cooperative firms would provide employees free insurance, some through their own underwriting, others in cooperation with similar smaller companies through a mutual insurance company that might even hold some of their stocks. 

E.G. writes about expanding and diversifying housing, including considering Condo and HOA boards part of the movement. Expanding to more disabled and senior housing is proposed. While disability housing requires a housing council, this is for input, not tenant governance. I would have both employee-owned and traditional firms provide housing for younger employees, for example buying condos near a movie theater or mall for young adults and apartments in office parks for recent graduates and interns, which they could keep until they are ready to buy housing through the firm, although I would reserve the latter for employee-owned firms to guard against peonage.

Taking this out of order:  small businesses could join into cooperatives to market their products and to consume services. Some such businesses are really employees of a larger franchiser or firm that forces them into 1099 status when they would rather be and really are statutory employees. Both employee ownership, pulling back franchises and tax changes could eliminate this exploitation. I am no Distributist.

E.G. favors making employee ownership a significant part of the US economy, including changing the rules to expand democracy in ESOP decision-making. I am all about that. There are also laws that limit union investment in employee-ownership. He concludes the chapter by stating that we can do anything cooperatively with a shared interest and that some activities are best suited to meet common needs that others are not. He is correct. He concludes the book by saying we must take back our democracy from the wealthy, both through legislation and attitude and to begin to work on expanding cooperation.,

We have a lot to do, but we must get existing ESOP workers excited about doing it. To do so, we must do much of the above so that workers control the means of consumption. Cash and prizes like this (including education funding as well) will turn employee ownership into more than an additional chore at work. A key to doing this is to end stove pipe cooperativism in much the way I would expand Land O Lakes if still a member. Credit Unions, housing, food cooperatives et al must be components of the same organization. It is not enough for them to just associate with each other. If we want to make legal changes, including shifting part of employer payroll or value-added taxes to buying employer voting and preferred stock (and edging out the capitalists), we must show a working model and expand it. We must Occupy Capitalism! Until we do so, I do not believe the political option is at all possible.

Tuesday, October 10, 2017

The Center for Fiscal Equity: Reaction to Michael Harrington's Socialism: Past and Future, 25th Anniversary Edition

The Center for Fiscal Equity: Reaction to Michael Harrington's Socialism: Past and Future, 25th Anniversary Edition

What Then Must We Do? by Gar Alperovitz

This book is important because the status quo is no longer sustainable. Of course, this is not just a straight review. I have included some of my strategies to get us where we need to go. Also, I have the benefit of 20/20 hindsight on our recovery from stagnation over the last few years and have included prospects for going back to it under our moronic president.

Alperovitz begins in Part I by laying out the System Problem, starting with the numbers on how the US compares with other nations in terms of well-being and equality then diving deeper into how unequal income is, how tax rates have gotten lower on the wealthy and how poverty and real earnings have not improved while corporate taxation had declined. He looks at how politics is working to do what needs to be done and whether what FDR did was an exception to the rule (Richard Wolff would say yes). As far as I can tell, even after the latest worldwide crisis, things are not moving. In his book Socialism, Past and Future, Michael Harrington predicted the 2008 crisis would occur in the 90s, however the Clinton era seemed to delay but not stop it.

Back to Gar. He looks at the postwar boom and notes that everyone else was rebuilding from the war and that there was much federal money in play during that time, including massive military spending. The third problem is that Labor, which was dominant during the boom years, is a shadow of itself. He looks at Obamacare’s passage to see if it reform is possible and finds that it is an incremental improvement, not a radical change. Finally, he looks at the civil rights revolution, from race to feminism to gay rights. Most of these victories are legal, not political and on race and gender much of the past economic inequality maintains.

Part II addresses evolutionary reconstruction, both old and new systems. Faced with the assumption that there is no alternative (TINA), we look at how we got there from the traditional list of feudalism, nineteenth century capitalism, state socialism (aka state capitalism-Wolff or bureaucratic authoritarianism - Harrington), modern corporate capitalism (pure capitalism from the trust era, managed capitalism aka democratic socialism, fascism) and Chinese communism. Note that in the U.S., 400 individuals control more than half the population. How much more concentrated can wealth get? More importantly, is there a way back to democracy in civic life and ownership?

Gar starts with the legendary Youngstown steel plant turned to an ESOP after the Carter Administration pulled promised funds in 1978, with the help of the Ohio Employee Ownership Center at Kent State, which also operated the Capital Ownership Group where Gar and I were both members. There is also the partnership between Case Western and the Cleveland Clinic to work with employee-owned enterprises. Unions are now finally joining this effort in major cities. People are looking at Mondragon as an example. Gar stresses that this is not just policy development, it is institution building.

Next, Gar looks at the many kinds of worker cooperatives, including agricultural, rural electric, insurance, food, retail, health, artist, credit union, high tech, taxis, biodiesel, solar, Part B Corporations, social services, land trusts, etc. I wish he would post the list because what these all have in common is socialist stove-piping and I would love to sell them on expanding their scope into more vertical monopoly in consumption, as well as production. They do one thing. Advanced socialist companies should do many things if not everything that their members want to use, from energy to housing to finance to schools to food (buying, eating out or growing-in). Socialism is much more attractive when workers know they can control the means of consumption as well as production. They do so implicitly now. Starting the dialogue lets them make these decisions explicit.

ESOPs are another form of socialist organization. The National Center for Employee Ownership does publish these databases, which I will use to urge more integration, although the 100 I am starting with are leaving some important ones out, like Hy-Vee, where my mother used to shop. Gar tells the story of how Louis Kelso and Senator Russell long set up ESOP tax incentives. The folks at the Center for Social and Economic Justice carry on this work urging the use of capital credit. I would expand ownership by redirecting employer contributions to Social Security, but only for the workplace, not for Wall Street. Of course, as Gar relates, ESOPs are not exactly hot beds of socialism, which has some workers consider ownership as chore rather than as an empowerment. They also do not allow warm body voting (one worker, one vote), but there are proposals to change that. Indeed, there are a lot of legislative changes needed to get the full potential out of ESOPs and COOPs, but they need to be both bigger and more widespread to demand it. As Gar relates, these firms work better, so this won’t be too long in coming. Organized labor has not been an avid participant in these companies. Gar thinks they will and I agree, if only to act as the representative of their members on ESOP and Cooperative Boards, which may still exist inside of decisions the membership votes on as a whole. Baby-boomer retirement may accelerate this, but I am banking on tax code changes.

Part II ends with mention of Gramsci and his ideas of cultural hegemony, the ultimate being TINA (where he began). Gar’s challenge is to create a coop or ESOP. I have one better. Figure out a way to improve and expand existing employee democracies that is so successful that they pay you to help them. In other words, let us develop some consulting models, run them up the flagpole and see if we can become hegemonic.

Part III looks at the “checkerboard” of municipal and state possibilities.  First-things-first, he examines and shoots down the myth that Adam Smith created an economics that called for an unfettered market place with no governmental intervention.  Friedman, Hayek and the Austrians assumption that this was ever the case is false.  A shining example is corporations seeking payments to relocate or stay in a particular location, from tax abatements or credits to my favorite example, a new stadium.  Gar is not criticizing, he is suggesting that democratized firms and institutions can insist on the same kind of thing, especially where most needed on environmental projects.

Socialism American-style already exists. Publicly owned utilities pay executives less, as do energy and other cooperatives.  Profits from these firms can also fund other government operations and are often more green (which is important if you have noticed this year’s hurricane season).  Public development projects, like Boston’s Faneuil Hall, are also an example of a public-private partnership.  I have never seen so much junk food in my life.  Transit area development is also socialist.  Let’s not forget broadband. Hotels are like stadiums as far as public land and private building linking up. Trump’s Post Office Pavilion Hotel is the most recent example.

Public hospitals used to be great socialism until the privatizers went after them.  Now they are monopolistic and a reason for going for Single Payer (and Purchaser).  Of course, cooperatives and ESOPs could also buy their own hospitals.  Some local power depends on capturing methane or burning waste, however I would like to see that at a household level. Pension systems are another area, although in recent years the defined contribution industry has been going after them, giving them bad ratings in order to sell them a product that gives brokers more and workers less. Better to convert to Social Security.   Some states help out ESOPs. I would like to see some of these ESOPs return the favor and take over more government functions for the support of their members. States help start-ups, although I don’t know that there are any that don’t stovepipe their socialism by letting workers control the means of consumption except as isolated purchasers. Finally, Texas gives its education system money from oil and gas revenues, which keeps property taxes lower.  I would double check the equity of its distribution.

On the other side, there is a lot of pain out there in the cities and states, mostly from ill-advised austerity (which if you look probably coincides with the unwillingness to tax sales, real estate and income adequately.  Since this book was written, Kansas has become a watchword for stupidity in tax policy.  Even its Republican legislature is backsliding. I suspect that ALEC membership has something to do with the new ideocracy.  Gar is counseling going forward anyway. Unions and the poor can cite a common interest in defeating austerity, which sometimes works. Using public purchasing power to stabilize low income neighborhoods is helpful, as well as public and semi-public land trusts, attacks on corporate welfare giveaways, community organizing and green projects. Taking over municipal electric system, developing urban Internet or cable and developing lease writes to public-private property also reduces the need for austerity while building coalitions.

Part IV addresses the hot spots of banking, health care and crisis transformation. Government action after the Great Recession did little to break concentration in banking. The telecomm breakups gave us AT&T and Verizon, so there was little change. Glass-Steagall remains repealed and dividends remain unregulated. If even the Chicago School thinks regulation is impossible, what is left but nationalization? What about public banks at the state and urban level? There are possible, but I favor a world where most financing for investment, consumer finance and housing is done by employee-owned companies, with the banks simply ceasing to exist once the transformation is complete.

Our health care system is the most expensive in the developed world and has some of the worst outcomes. I bet that if you control for the size of the low wage population, both recent immigrants and the descendants of slaves, that the problem is generational poverty as much as it is plutocracy. Countering with Medicare for All is good, although Obamacare with the highest subsidy is roughly equivalent to Medicare. What Bernie is pushing is to make Medicare as cheap as Medicaid and then expand that. There are other options, like expanding the Uniformed Public Health Service on a British model or have employee-owned firms opt out of either Obamacare or Medicare for All by hiring their own doctors as employee-owners and either own their own hospitals or at least buy into them. Both would be true socialist medicine.

In the pre and post war era, unions and other institutions were seen as countervailing power to big business. The Reagan revolution changed that, both by beating inflation through lowering taxes on CEOs and by deregulating government and labor law enforcement. Gar sees change coming locality by locality with alliances, patience and luck. I disagree. I favor showing workers that if they ask for it together, they can control the means of consumption.

Gar looks at bigger possibilities and precedents. I agree that regional, rather than national public industries are probably better, but even nationally, public firms do well on cost. The problem capitalists have is that there is no difference between cost and price, i.e. profit, for them to play with and control. Hospitals such as iNOVA have quite low costs, but the prices? Not necessarily. He cites the car bailouts, among others. I sent both GM and Chrysler, the UAW and the White House employee-ownership proposals. No one gave me the courtesy of a response. I did not expect one. The Car Czar was an old auto executive. He was unwilling to step out of the box and he was to be the change agent. We must assume the workers must be the change agents. I have not yet given up on the auto industry.

Part V addresses narrow minded efficiency, public enterprise and all that. By efficiency, he describes technical efficiency as opposed to allocative efficiency. Of course, neither concept applies to either governmental operations or big businesses, which are often monopolies or oligopolies. The latter pervert the free market and extract more profit than such a market would allow, while public enterprises are likely as technically efficient, but don’t extract profit. The Distributists et al seek small firms with distributed power, which may or may not shed the effectiveness that bigness provides, although they would operate in perfect competition. Literature on public or state capitalism has shown that CEOs in that environment rely on political connection rather than success, which the Soviet experience shows plainly. In cooperative socialism, however, where employees control the means of consumption as well as production, equilibrium balance is very possible, duplicating what a perfectly competitive market might produce. I suggested such a system to GM and they were not having it. Hopefully my proposal is still in their files, because their need for what I am offering is still there, especially in the rust belt wastelands of Cleveland and Detroit.

Airlines are the next target. Before deregulation, with price floors and anti-competitive policies, fares got lower faster than afterwards. After regulation, there are cities with bad service that really deserve better, prices that reflect a concentrated market and low fares for competitive routes. The free market is not delivering as promised, although there is both bankruptcy and tax breaks to subsidize the dysfunction. National airlines seem to do better, although Aer Lingus has had its problems of late. Even United, which is employee-owned, has declared bankruptcy at least once, mostly because it was run like a capitalist firm with strong unions who were not acting as owners. Instead of a national airline, I would suggest cooperative airlines as part of larger concerns or consortia of employee-owned firms. Like health care, if the users are also paying the freight, efficiency will result.

There is the question of grow or die, which is stock market driven. It is better to have a strategy on how to deal with growth in small and medium firms, public and private. Even cooperatively owned firms deal with this when they decide whether to add a business because the membership wants to use the product or simply purchase commodities, although a bias toward expansion will exist here as well. Also, because life is a Ponzi scheme, seeking growth is not unnatural, although employee-owned firms with in-house production and consumption can better control how much they want to produce and consume, allowing more leisure. Of course, with all things socialist, it will be up to them.

Part VI discusses the emerging historical era. He starts by repeating the themes of the early part of the book: how the political process is stuck and the ability to move a progressive agenda has not come back and possible solutions for democratizing capital, including cooperatives, employee ownership and checker board reform connecting with state and local governments. The democratic socialist model which allows private ownership of industry in return for socialized human services is in decline and was never going to get us to worker democracy. The continues by illustrating that the conditions that caused the Great Depression to lead to transformation no longer maintain because those structures are still with us and Capitalists know when to support existing correctives to keep prevent collapse and more radical change. There will be no collapse leading to either a proletariat, libertarian or distributist revolution. As for a major war offering a reset, the concept is unthinkable in the nuclear age.

Gar talks about stagnation. It does exist in parts of the world and the nation where austerity has been practiced as the cure for the Great Recession. That happens where people worry about the government’s bottom line rather than the economy. Luckily, as a nation, the spectre of stagnation has gone away, at least for now. In 2013, Obama found the votes to keep tax cuts for the bottom 98% of taxpayers (probably too big a group) while letting them increase for the top 2%. Since then, growth has occurred, as Keynes would have predicted, and both joblessness has declined and home prices increased so that many are no longer under water.

In each of the last three recessions, tax reform or tax cuts favoring the wealthy have occurred, resulting in more investments in garbage and leading to the S&L crisis, the tech boom/bust and the Great Recession. Tax cuts do not add to investment in real corporate infrastructure, which is funded when demand increases (not when money is cheap). Either the stock market is bid up or bad investment vehicles are created. This will be the result if Trump gets the cuts he proposed. The oil boom came from both deregulation of NYMEX and too much money in the system. Now that Dodd-Frank regulations on NYMEX are in force, prices are lower, and because food prices are linked to oil, these prices have stabilized as well. Only climate catastrophe can intervene, but the regulated market won’t let the price increases become permanent. Of course, because we know that people buy gas at higher prices, there is no excuse for not raising carbon and gasoline taxes.

Change will be difficult, especially in light of citizens united and the decline of organized labor. Fiscal difficulties still exist, although these are more political than real. Health costs have stabilized with the success of Obamacare and recent tax increases have shown that Keynes is still the only real theory for today. The sad fact is that anti-taxers use sexism and racism to keep their values voters in line, although as it becomes clear that there is no going back from social change, there will be an opening. The overt racism of some Trump supporters may be poisoning the social issues well for the GOP. Indeed, change seems more likely now than when Gar published this book. He offers four potential strategies: evolutionary reconstruction, checkerboard state and local development, crisis transformations in health and banking and big crisis transformations like GM and AIG (hopefully the next time Larry Summers won’t be there to stop real change).

Gar offers five options: 1. Demographic changes leading to progressive majorities, although in a Citizens United world will these simply be different neo-liberals? 2. Movement building toward more progressive solutions, although such movements, like the populists a century ago, had limited results, 3. Occupy and other young person’s movements could move things forward. In hindsight, the Sanders Political Revolution has magnified this possibility, although we have yet to see systemic change and Sanders did not offer much in that department, staying with social welfare items like Medicare (really Medicaid) for all, free college tuition and a $15 minimum wage. His positions have still left the world safe for capitalists. 4. Further deterioration could lead to violence and a fascist backlash. While it is a rule of revolution that to radicalize the population, you must force repression, most hope it won’t go that far, and 5. Slow development along the lines developed in this book, evolution rather than revolution.

I will add a sixth possibility. Making employee-ownership more attractive so that workers demand it. Right now, employee-ownership is an extra-duty chore. Make it worthwhile for the workers through cash and prizes, i.e. workers controlling the means of consumption, and things will likely move much faster, with such firms using the tools of Citizens United to ease some of the obstacles to more rapid adoption and even diverting social insurance funds toward giving everyone an option to convert to better ownership.

Part VII concludes the book. A starting point for bringing about the needed changes are the American ideals of liberty, equality and democracy, even if normal politics evaporated in the 1980s. We need a new system and if corporate capitalism and state socialism are not wanted, what do we want? Can we continue to have a democratic nation where people spend most of the day at work with no democratic rights? Is it possible to have democracy in one sphere and not the other? Not likely. If democracy is for sale to the highest bidder, can it survive? Can it survive if local communities are captives of capitalist demands? Can the environment survive in such a political economy? If not, what do we want?

Can we manage a political change from Washington, or do we need something more regional? (I propose seven regions of equal electoral vote strength). Large employee-owned firms could organize as separate entities on regional lines, but expand vertically as the worker-owner-consumers see fit. In the interim, however, pain is increasing for many while solutions are slowly causing the system to evolve. If we wish to control this evolution, we must change. The resources available for democratization are huge, though badly distributed. For now, our resources seem limited and we use more than our share (although this can change too. A small committed group will make this change, as has always been the case.

The Afterword explores the question of long-term systemic design. This is where to go for further research by Gar and his Democracy Collaborative. America Beyond Capitalism is the seminal and periodically updated book and there are other must-reads. He favors community-wide ownership structures for further research. Of course, this can happen two ways, with the community helping to create ownership or my method of employee-owners consciously creating community, with the relevant human and physical infrastructure. Either way, democratizing wealth is important. While in the long-term, family fortunes do dissipate as younger generations with trust funds fall into addiction and alcoholism, perhaps transferring productive wealth sooner than later will help all concerned.

Other research questions include the challenges of scale, the role of planning (and by whom), moving from isolated projects to integrated systems, or what I would call going beyond smoke stack socialism, and how to globalize these changes and go beyond our current foreign policy, which was America and capitalism first long before Trump. My own preference is to turn multi-national corporations and supply chains into systems where every international part of the system gives workers the same deal provided to American employee-owners, from share ownership to an equivalent standard of living, which will eventually move the world to not only equality, but to peace. Who wants to play?

Saturday, September 30, 2017

Democracy at Work: A Cure for Capitalism by Richard Wolff

Wolff introduces this book with the example of FDR triangulating between a Marxist union movement and Wall Street, which allowed him to create a fair amount of social democracy, including Social Security. He contrasts this will the recent crisis, where the only solution tried was bailing out the banks while doing nothing for the borrowers, who he sees as blameless, although I must admit that no one held a gun to my head when applying for too much consumer or housing credit, almost always in a cooperative credit union or government housing program. At least government helped when it came time to wipe out that debt, plus some medical debt as well. The answer Wolff proposes to Capitalism is the Worker Self Directed Enterprise (WSDE), which would make production, distribution and governmental decisions with local communities.

Chapter 1 shows where Capitalism is failing. The key feature in capitalism is not private ownership of the means of production but the fact of the labor surplus, where workers produce more for capital than they are paid in wages. Workers are divided into productive and unproductive. As a cost analyst, I am not sure this a distinction with a difference. Distribution is not productive, but you cannot get paid without it. Capitalism itself yields inequality, cyclical downturns and environmental devastation, as did state capitalism.

Keynesian interventions and regulations helped manage the pumps from the end of the war through the 70s, including and especially labor peace, although Capitalists fought back with Taft-Hartley and the Red Scares of the new right, from the Birchers to the Moral Majority. From then, the Neo-Liberals dominated both parties if they wanted to win, through the Obama presidency. The book was written before the insanity of Trump. Automation, women working, trade and outsourcing and immigration served the interests of executives who, in my analysis were given incentives to encourage these trends (and generally control worker pay) by the tax cuts and reforms of Ronald Reagan and George W. Bush. Without wage growth that kept up with productivity, borrowing became necessary, leading us to the Great Recession, which was caused when Asset Backed Securities and speculation in the NYMEX oil market collapsed (which Wolff missed).

Chapter 2 focuses on government responses. Wolff covers the interplay between ABS default at Credit Default Swaps ruining the credit market. Sadly, there are still those right wingers who think loans to poor people from Fannie and Freddie did them in. They won’t believe Richard. He also covers TARP bailouts and stimulus. (I gave Chrysler and GM a plan for using the bailout for effective employee-ownership. Not even the UAW gave me a response) Richard thought taxing the rich, especially corporations would help. It was not tried either. Here is where Wolff brings up the role of neo-liberal tax cuts in the last 50 years, and the right-wing argument that doing so restrains government waste (which it never has). Still no mention of the incentive to cut pay or keep it at inflation. Instead, he mentions that government debt hurt the ability of government to deficit spend its way out of the Great Recession. Instead, from Greece to the UK, the world turned to austerity. aka trickle up (which in the UK probably fueled the Brexit). He then describes the U.S. socializing losses and its too big to fail monetary policies in the wake of the crisis, yet jobs programs (nor mortgage debt forgiveness never materialized.

Chapter 3 concludes Part I by reiterating that private capitalism depends on labor surpluses generated by workers and is unstable. State socialism became state capitalism, with bureaucrats rather than workers controlling the worker surplus. Crisis has made more state control an option, but no good means of doing so has been worked out (Could Dodd-Frank be strong enough, unlikely).

Wolff does not address the reason that capitalists claim a right to the labor surplus, the assumption of risk by their investors. They exercise fiduciary responsibility over the company in their names. Indeed, they have enacted laws that make this a requirement of their jobs, with all other decisions
subordinate to that end. In that rationale, workers are mere factors of production, discardable at will.

It seems we have not moved much beyond slavery after all. State capitalists have a responsibility only to the state, but because they were responsible to everyone, they were responsible to no one except the Party. This was effective, but not enough to guarantee success. The politically connected could fail without fear of loss of position, so they did unless someone was watching, or at least succeeded on their own schedule.

In WSDEs, workers have both a fiduciary responsibility to themselves and a moral one. They are no longer factors. Indeed, in both socialism and capitalism, they bear more risk than the capitalists admit. Most workers do not have the wealth that would stop them from having to work and even if they did, until all medical and human services are automated, solidarity demands continued labor.

Workers have the most at stake. Investors only risk money and can move money into and out of various investments with a keystroke on their computer, or even let the computer do their thinking for them. Workers are giving up a day of what cannot be replaced, a day in their lives. That is more valuable than money, especially as one gets older. They also cultivate social relationships. While management considers them expendable, they and their follows have economic lives because they have jobs. Often, they cannot work for anyone else, so unless their employer provides all of the money and services they need to sustain themselves, they truly are slaves. Capitalists, on the other hand, both private and state, take all the goodies they can. Investors receive a ”normal” return, workers get as little as possible to keep them working and capitalists keep the rest, with CEOs often packing capitalist boards or party bosses with cronies who will give them all that they can steal. It is time for them to go.

Chapter 4 describes how capitalists distribute the surplus generated by employees, from sales personnel to shareholders and CEOs. In such firms, the board are the capitalists who make the decisions. The goal of decision making is profit maximization (including growth and market share), which can include automation, controlling labor markets and prices. Workers might use a union to alter decisions, but the capitalists generally call the tune and see to their own interests first, both in the company and in politics, which creates policy that hurts workers, who have less time and money to counter the bosses. Labor provided a counter-weight, which is why capitalists have-sought to decimate it. Even in 2007-09, public sector growth was resisted in favor of subsidized private sector growth. Since the book was written, Obama geeked in 2010 regarding letting taxes go up for the wealthy and the economy stayed stagnant. Indeed, further austerity actually hurt the recovery, although it did set the stage for the 2013 tax bill which let taxes on the rich go back up. Since then, the economy has been growing.

Chapter 5 deals with the problems of state capitalism. First, Wolff delineates the main differences between capitalism and socialism. Capitalism has the means of production owned privately (including, I would add, the employees), keeping the labor surplus for itself and using markets for supply and distribution. Socialism distributes labor surplus to the people and relies on central planning. There have been many socialist and communist experiments in the 20th century, from the welfare socialism of the Scandinavian countries to the Communism of Russia and China, which devolved into what Michael Harrington of DSA called Bureaucratic Authoritarianism or what Lenin called State Capitalism. Regardless, worker democracy has never been tried. Capitalists and Bureaucrats own and control the labor surplus, less taxes or social services, because of this lack of democracy. It is the difference between making lives better for the slaves and ending slavery (which is hardly ever totally successful, even in socialism - at least not so far).

Part III begins with Chapter 6 and an examination of Worker Self-Directed Enterprises. Wolff differentiates between the direct democracy of production workers in WSDEs and both capitalist and state capitalist boards of directors, who reserve all decision making to themselves. Only direct democracy has the workers control the means of production, according to Wolff. He contrasts WSDEs with ESOPs, which also have decision making boards (and in my experience, are not at all radicalized), worker-managed enterprises, which still delegate decisions to management and cooperatives, which have to do more with joint ownership than decision making by every productive worker. Coop boards function like any board of directors. Wolff is not a fan of representative democracy by workers, although if workers are self-aware enough, there are likely some things that can be done with representation and others where direct votes are required. I suspect most arrangements will not be adjusted very often, even in a WSDE.

Chapter 7 starts with a description of how decision making occurs in WSDEs. Some decisions are made by both productive workers, who make up the board and others by both productive workers and enablers. Frankly, I am not sure there needs to be a difference as direct production declines and customer contact workers, who are enablers, take on more of the creative edge responsible for profitability. Is market research not essentially the first step in production? If someone cleaning the shop floor between shifts enables production workers to not do so, are they not as essential? I suspect so. Some of this is Marxian orthodoxy showing up where it is probably no longer required. Indeed, if employees are not essential to the operation, the position should be abolished.

Wolff talks about how WSDEs may seek to make more such enterprises, but rather than reproducing by fission, I would suggest example and radicalization of other workers is the more essential goal. The question of managers is discussed. Wolff suggests rotating workers into these positions, as opposed to hiring them. I like simply electing them, from the CEO to the shop foreman, although before election, having candidates for these jobs (and there is always someone who wants to be the boss) bid for the position in open auction until the bidding gets to an agreed upon floor, with an election by the workers supervised to determine who gets the job.

Most WSDE’s will not clone themselves. Indeed, they should expand vertically along both the company supply chains from resource extraction to home delivery and the personal supply chain from education to housing to retirement (workers control the means of consumption), while avoiding horizontal integration to keep the market honest like it has not been for a long time. It will fall upon socialist consulting firms to help facilitate both new WSDEs and to convert existing companies to this technology, although such firms will have to walk the talk as well.

Wolff describes two kinds of employees in WSDEs, production employees and everyone else from cleaning crew to managers. Production employees would serve on the board and would allocate the labor surplus, while the remaining enablers would also participate in deciding on all other issues. Again, I am not sure how often issues need to be decided after setting up systems and how much can be delegated to management or to some representative body. If we are doing our jobs as socialists, the workers will be empowered to decide who decides.

Wolff compares technological change between private capitalism, state capitalism and WSDEs. Private capitalists do incorporate some technology changes, but also block innovation as well if the innovation would be expensive or hurt other products or related industries. This is why Europe and the US get different carburetors. Capitalists do the minimum. State capitalists do likewise unless it affects the state. WSDEs will have more than the Board make some of these decisions, especially about labor saving, Wolff suggests a government bureaucracy might be established to cushion the blow of innovation.

Both private capitalists and state capitalists have horrible environmental records. CEO benefit and investor profit maximization is hurt by taking up extra funds protecting the environment. Workers live closer to the environmental hazards their jobs create. They would be a more effective force in limiting pollution (although that is not universally the case if they feel their jobs are on the line because a co-worker is ratting them out). Better and cheaper pollution prevention and a strong government or industrial association to mandate their uses (and sponsor new technology) seems essential to me.

Wolff talks about how to compress minimum and maximum pay in WSDEs, suggesting rotation is the answer. I suggest an equal base wage for everyone, with additions for family size, which should be subsidized by the government in business taxes and using stock grants and dividends to reward innovation, educational attainment, longevity and management position, among other factors, would be dealt with. I have a whole essay on pay equity that does so on bindneranalytics blogger account, but let me briefly sketch some points.

Instead of setting them up in a new WSDE as Wolff suggests, innovators could be given cash bonuses for their inventions rather than higher salaries (most innovation is a riff off of existing technology that the WSDE would already own) and/or additional preferred shares based on the future profitability of the invention. Every instance may be voted on by the member directors or they could set up and vote on a system that consistently implements such decisions. They would decide which strategy they want to employ. With luck, such arrangements will both attract the best workers to these new enterprises and create better products and more profitability. This would force capitalist firms to adopt similar systems and essentially convert to WSDEs, although there are other ways to speed this up.

There is also the question of both layoffs and innovation. Should there be a fund for paying workers while they are retrained? Should it be governmental using taxes from WSDEs? I propose it could or workers could live off of the dividends from accumulated shares. Workers with enough shares could simply retire (with any mortgage held by the WSDE forgiven or paid while the worker is in transition). Indeed, if it does not make sense to retrain a worker, early retirement for whole cohorts is a good option. Should they continue to vote their shares? For that matter, should voting be warm body (with each worker having one voting share and earning a new preferred share each month, with or without dividend reinvestment) or should all shares be voting. WSDEs would make these decisions based on how much experience is important to making the right decisions for the whole. The more we need a bias for experience, the more share accumulation and retiree voting should be considered (like in the NFL). The more innovation is important, the less experience needs to be given preference. Wolff suggests that setting up new WSDEs could be a response.

Likewise, WSDEs could hire future workers while or at the beginning of either technical training or the third year of college, paying their tuition, living expenses, a stipend and maybe even some stock, at the discretion of the WSDE. This will give WSDEs the best employees, again forcing capitalists to follow suit. It also takes away any claim that members deserve higher salaries for their educations that they or their parents did not pay for. They may be given stock upon degree completion to provide a bit of extra income, as the market would for a while, but base wages would stay flat. If the work obligation incurred for this education (less any tax benefits provided by the government) does now work out, a government loan program would take the debt off of the WSDE’s hands and any stock grants would be cancelled or taken to lower the value of the debt.

Chapter 8 addresses ownership and markets. Socialism exists at the marco and micro level. Wolff suggests that one of the failures of the Soviet state was ignoring micro-level transformation. In WSDEs, the State could actually own the means of production, the WSDE members could or there could be conventional share system with some shares sold on the market. There could also be a mix. I do not favor state or outside ownership, especially if the WSDE or company offers employee-owners mortgage services, because without such ownership lending can be done at zero interest. Of course, WSDEs would decide for themselves. If there are shares, however, there will be share voting. If experience is important, then voting shares would be granted monthly (and if dividends are reinvested, additional shares would be added as well). Of course, this would make ownership top-heavy. To reduce this effect, voting shares would be granted less often, say one after the probationary period and another one every five or ten years, with preferred non-voting shares granted each month. Any outside investors would receive non-voting shares unless part of a reciprocal arrangement between WSDEs who provide services for each other (say, the local electric company). For absolute equality, everyone would get only one voting share. Again, WSDEs would decide. What should be mandatory is insurance of WSDE investments. A third of shares should be traded to an insurance fund to make members whole if the WSDE fails for whatever reason and to intervene if 18% of voting shares suggest to the insurance fund that management is failing or corrupt, so that the fund would take control of the WSDE to investigate and help members resolve the situation.

On the question of product markets, WSDEs could rely on central planning or on the commercial markets (which would likely be free for the first time with capitalism gone). On some projects, like rebuilding the transportation system, I would suggest partnerships between federal, state and local government, WSDEs, car companies and road construction companies, utility companies and any non WSDE employers to build electric cars with underground roadways, central computer control and energy from the ceiling (like electric trains) and interlocking share ownership where appropriate to govern the operation and to assure that retirees can use the system for free by cashing out preferred shares in both their WSDE and the electric company. The network would be national but ownership would be localized.

For most things, my axiom is that to secure control of the means of production, we must first give workers control over the means of consumption, not individually but collectively. If we can show that the cash and prizes are better collectively, workers will want to form WSDEs and use them to improve their lives. Currently, it is not vital because most workers think they have good or at least the best jobs they can get. This goes way beyond voting for a free cafeteria for breakfast and lunch (although it is always a good idea) or free business suits to WSDE owned home construction WSDEs and WSDE financing of them at zero interest, rather than using a credit union. This carries over into medical services, education and other governmental social services and even time shares at the beach and overseas (and airline vouchers). Implicitly, workers are given cash for these things and WSDEs could decide to continue, or we could build a cashless society and freeze out the financial sector entirely.

If there is any takeaway from this review, it should be ”Workers control the means of Consumption.”

Chapter 9 addresses Economic and Political Democracy. Capitalism does not like democracy and is designed to keep workers so busy that they really cannot if they want to. WSDEs will be smarter than that and will give workers practical experience in workplace democracy that can be extended to the political side (although I suspect some WSDEs will include representative governance, maybe through unions or professions to do the day to day decisions that management can’t do, although cash and prizes will likely be voted on directly, as well as CEO and management hiring). This is quite a difference from the forced authoritarianism of both private and state capitalism, which usually bleeds into our politics. Democracy will reverse the trend, at least to the extent that WSDEs do not absorb government services.

Even with workers in the majority, private and state capitalists kept control, as the election of Donald Trump, which happened after this book was published, as well as a long line of neo-liberals of both parties in the White House and Congress, illustrates. Economic issues, with the exception of minor changes to tax policy, are never discussed, with the Affordable Care Act being the shining exception, but even that was trapped by the Capitalists in a bill from the conservative Heritage Foundation that kept all the industries happy Usually, the parties use non-economic issues to distract the masses, especially issues like abortion where there is no real room for action by either side. That issue and raw racism is what we have now descended to, as well as the intervention by Russian Oligarchs, who the right wing now try to protect.

Wolff contrasts how FDR could use the CIO and radicalized workers to move along the recovery from the Great Depression. Obama had less luck because the capitalist hegemony gave him less room to work, especially with McConnell doing their bidding. Of course, many of FDRs innovative programs and more are now a part of the permanent government structure. His biggest problem, we now know, was in his own White House with Larry Summers counseling against mortgage forgiveness and on letting the Bush tax cuts expire in 2010. It turns out that once 2013 came around, with Summers gone, Obama was able to outmaneuver Grover Norquist and the Freedom Caucus and allow taxes on the top 2% of earners return to Clintonian levels (plus additional taxes from the Affordable Care Act). Since then, with rich people having less money to spend on shit investments, the economy has come creeping back and mortgages are finally no longer under water.

It is important to note that Capitalists with government in their back pockets have frustrated union organizing and ignored wage and hour (including peonage) and workplace safety laws, have passed ERISA to limit employee-ownership and Taft-Hartley to limit union-ownership. Reversing all of this must be a priority.

Chapter 10 talks about WSDEs in Modern Society. Capitalists engage not only monopsony in hiring workers and purchasing supplies (especially overseas), but in displacing smaller firms with larger monopolies and oligopolies. I would add franchises to the list, as these are how product distribution risk and labor organization are averted). WSDEs would collaborate and reverse this trend. Of course, I would simply try to take the larger firms over, probably splitting them up regionally and making them part of WSDEs. Their supply chains too. I would not forgo dividend payments to WSDE members, for reasons stated above, but would instead press for preferred financing at the Federal Reserve Discount Window to fund conversion costs. Wolff suggests WSDEs would be smaller (the Distributists do too). I disagree. He compares workers in capitalist firms with WSDEs in reaction to investment that might take jobs. I suspect that workers in capitalist firms will vote with their feet rather than resist in their old employments. Indeed, I suspect that Capitalists will have to start copying WSDEs, especially once WSDEs of larger size, say General Motors, are converted.

Wolff talks about differing economic flows between WSDEs and capitalist firms. On infrastructure they might be alike but different on public education (training worker board members v. drones), assuming WSDEs don’t absorb public education or send their kids to religious schools or charter schools (in either case they should demand a seat on individual school boards). Production location decisions will be different. WSDEs will work with local governments on Smart Growth. Capitalists demand concessions in order to come and to stay and may outsource or move anyway. Just look at the NFL, which, along with local governments representing the taxpayers and stadium workers, should become a WSDE (including retirees). Wolff and I agree that the WSDE can be exported to overseas firms, although I would do so by having multi-nationals become WSDEs and buy their supply chains, as well as encouraging by example (or just changing the market).

Wolff returns to differentiating production workers and enablers and stresses the need for political skill in defining limits between the two. I am still not sure they can be separated. I worry more about the Kelso model, which gives each member of the workers family capital credit to buy and then vote shares, which gives larger families more of a vote than smaller ones. Each worker should be equal. Production, however, demands less and less of the enterprise, especially when the creative work is done here and the labor is performed in Asia. In a multi-national WSDE, the Asian workers would be the entire board unless non-production workers are included. As long as the production workers have the same standard of living and voting power, I do not worry about appropriation of labor. Indeed, sales personnel are as expert as designers in what sells and why, whether you are selling pants or spacecraft. Should the community be involved in WSDE decision making? Yes, in joint ventures, especially in transportation, education, land use and fire protection (to the extent the WSDE does not absorb these functions, in which case the former government workers would be WSDE voting members as board members or enablers, although if you look at the enterprise as including the means of consumption the distinction has to vanish).

Chapter 11 addresses Program and Personnel for Increasing WSDEs. Wolff suggests a federal jobs program to provide money to form WSDEs on a New Deal model. I suspect most of the infrastructure needed to do that already exists (just like we already have DOE power plants, a Highway Administration and a General Services Administration). Starting new agencies is not required. Funding them is and electing people who will fund them is crucial. Of course, taxation on the wealthy has gotten the economy moving faster than it was when the book was written. Still, local Workforce Investment Boards, Chambers of Commerce, Community Colleges and One Stop Job Centers could take WSDEs on as a project, possibly with SBA assistance or loans. Indeed, with loans, money would not even have to be appropriated. Existing Community Colleges could be given a how-to course on WSDEs with concrete instructions and checklists of things to consider. Indeed, if the course addressed financing, SBA money could be foregone or just one option. This could be offered WIB by WIB or college by college without any obstruction from Trump, McConnell or the House Freedom Caucus and its Randian Speaker.

Other options suggested include working with Cooperative Movements, Trade Unions and I would add ESOPs. Indeed, instead of working with them to pass legislation, they could be clients in converting their enterprises to WSDEs one at time. WSDE Organic Intellectuals would be part of that first wave of consultants who learn by doing, not just by advocating and studying. This movement cannot, as yet, win at the ballot box. We must first Occupy Capitalism in growing this movement. Then we can equalize the Social Security Employer Contribution for Old Age and Survivors Insurance (every worker gets the same credit) and then using a portion of that credit to either buy Employer Voting Stock (for eventual WSDE conversion) or buy into the WSDE insurance fund, which would pay dividends to them (as well as to widowed survivors of WSDE members). We don’t have the votes yet, but we will, probably in a political party combining progressive Democrats, Libertarians and Greens. Once the racism of Trump kills the Republicans, the Neo-liberal Republicans and Democrats will join forces and the rest of us will head for the exits. Becoming a third party is lunacy. Being another major party must be the goal. To get there, however, we need economic power.

That is the second take away: Occupy Capitalism

How we do it is important. In 1992, Boris Yeltsin was using a DC consulting firm to help him convert State Capitalist firms to employee-owned ones. I was at IBM at the time and faxed them a memo on how to convert and manage these firms, including share distribution. I am not sure if they used my scheme or someone else’s, but their plan included the provision that the shares should be available for sale as opposed to being held for retirement or at least until resignation. I implied the latter and that one provision ruined Russia, because the stocks were valued at about the cost of a bottle of vodka, which they were traded for, giving rise to the Oligarchs and Vladimir Putin. Details matter, although I think making WSDEs keep all the shares in the hands of workers (and maybe retirees) and not letting them be sold outside of retirement or transfer to a new employer must be one of them.

Thursday, September 14, 2017

Dei Filius annotated modernistically

Chap. 1. God, Creator of All Things

DF: The holy, Catholic, Apostolic, Roman Church believes and confesses that there is one, true, living God, Creator and Lord of heaven and earth, omnipotent, eternal, immense, incomprehensible, infinite in intellect and will, and in every perfection; who, although He is one, singular, altogether simple and unchangeable spiritual substance, must be proclaimed distinct in reality and essence from the world; most blessed in Himself and of Himself, and ineffably most high above all things which are or can be conceived outside Himself.

Mod: True dogma, as agreed upon by Church councils in the fourth century, with additional beliefs proposed by Church doctors such as Aquinas and Anselm, who base some of their writings on Plato and Aristotle. Because there is no ”evidence” for these propositions, their truth, for us, is made certain by our agreement with them. It is hubris to think we have the total truth in this matter, as the angelic child told St. Augustine on the shore. The child was trying to put the Mediterranean into a hole by buckets and Augustine told him he would never succeed, to which the angel responded that he had more chance of success than Augustine had in trying to understand God.

DF: This sole true God by His goodness and "omnipotent power," not to increase His own beatitude, and not to add to, but to manifest His perfection by the blessings which He bestows on creatures, with most free volition, "immediately from the beginning of time fashioned each creature out of nothing, spiritual and corporeal, namely angelic and mundane; and then the human creation, common as it were, composed of both spirit and body" [Lateran Council IV, can. 2 and 5]

Mod: Very true, but we keep trying, especially in thinking that our sufferings can somehow add to the passion of Christ.

DF: But God protects and governs by His providence all things which He created, "reaching from end to end mightily and ordering all things sweetly" [cf. Wis 8:1]. For "all things are naked and open to His eyes" [Heb 4:13], even those which by the free action of creatures are in the future.

Mod: God sees all things in time as a whole and acts perfectly within time toward them, which is not unorthodox at all. Modernism need not be orthodox. It can affirm eternal truth, but it must have a chance to look beyond just learning.

Chap. 2. Revelation

DF: The same Holy Mother Church holds and teaches that God, the beginning and end of all things, can be known with certitude by the natural light of human reason from created things; "for the invisible things of him, from the creation of the world, are clearly seen, being understood by the things that are made" [ Rom 1:20]; nevertheless, it has pleased His wisdom and goodness to reveal Himself and the eternal decrees of His will to the human race in another and supernatural way, as the Apostle says: "God, who at sundry times and in divers manners, spoke in times past to the fathers by the prophets, last of all, in these days hath spoken to us by His Son" [Heb 1:1 f].

Mod: This is a pious way to claim that prophets, evangelists and the Church heard God’s voice directly (we now know that probably none of the New Testament writers were contemporaneous with Jesus and that the books attributed to Moses were written centuries after his death). Biblical writers were certainly inspired, as Church writers are, both traditional and modern, but none take dictation.

DF:: Indeed, it must be attributed to this divine revelation that those things, which in divine things are not impenetrable to human reason by itself, can, even in this present condition of the human race, be known readily by all with firm certitude and with no admixture of error. Nevertheless, it is not for this reason that revelation is said to be absolutely necessary, but because God in His infinite goodness has ordained man for a supernatural end, to participation, namely, in the divine goods which altogether surpass the understanding of the human mind, since "eye hath not seen, nor ear heard, neither hath it entered into the heart of man, what things God hath prepared for them that love Him" [1Cor 2:9].

Mod: It is hubris to think that any have received revelation perfectly. All developed narrative and wrote for and with an audience. Likewise, all of the baptized have the ability to think upon these things in a spirit of love of God and be so inspired, although generally pre-existing knowledge and education helps to avoid error. Ordination, however, is not required. Amos was a dresser of vines.

DF: Furthermore, this supernatural revelation, according to the faith of the universal Church, as declared by the holy synod of Trent, is contained "in the written books and in the unwritten traditions which have been received by the apostles from the mouth of Christ Himself; or, through the inspiration of the Holy Spirit have been handed down by the apostles themselves, and have thus come to us" [Council of Trent]. And, indeed, these books of the Old and New Testament, whole with all their parts, just as they were enumerated in the decree of the same Council, are contained in the older Vulgate Latin edition, and are to be accepted as sacred and canonical. But the Church holds these books as sacred and canonical, not because, having been put together by human industry alone, they were then approved by its authority; nor because they contain revelation without error; but because, having been written by the inspiration of the Holy Spirit, they have God as their author and, as such, they have been handed down to the Church itself.

Mod: Historically incorrect. The Canon was established in the Fourth Century by a Council of the Church. While the sayings and stories of Christ were undoubtedly based on recollections of the early disciples and Apostles, they were not designed for history but for instruction. All inspiration of the Spirit, then and now, comes through human language and experience and the ability of translators. The Spirit still speaks.

DF: But, since the rules which the holy Synod of Trent salutary decreed concerning the interpretation of Divine Scripture in order to restrain impetuous minds, are wrongly explained by certain men, We, renewing the same decree, declare this to be its intention: that, in matters of faith and morals pertaining to the instruction of Christian Doctrine, that must be considered as the true sense of Sacred Scripture which Holy Mother Church has held and holds, whose office it is to judge concerning the true understanding and interpretation of the Sacred Scriptures; and, for that reason, no one is permitted to interpret Sacred Scripture itself contrary to this sense, or even contrary to the unanimous agreement of the Fathers.

Mod: The Fathers were not unanimous and we constantly learn through study of history and archeology what Christ may have meant that has been obscured by the Church itself or by a misunderstanding of earlier scriptures, particularly the Torah.

Chap. 3. Faith

DF: Since man is wholly dependent on God as his Creator and Lord, and since created reason is completely subject to uncreated truth, we are bound by faith to give full obedience of intellect and will to God who reveals. But the Catholic Church professes that this faith, which is the beginning of human salvation, is a supernatural virtue by which we, with the aid and inspiration of the grace of God, believe that the things revealed by Him are true, not because the intrinsic truth of the revealed things has been perceived by the natural light of reason, but because of the authority of God Himself who reveals them, who can neither deceive nor be deceived. For, "faith is," as the Apostle testifies, "the substance of things to be hoped for, the evidence of things that appear not" [Heb 11:1].

Mod: Our ability to see uncreated truth is hampered by a world in which unobscured Truth, which is God, is not present, which gives us human freedom to the intellect and the will. Faith is the relation of the soul to God, not an act of loyalty to the very human Church.

DF: However, in order that the "obedience" of our faith should be "consonant with reason" [cf. Rom 12:1], God has willed that to the internal aids of the Holy Spirit there should be joined external proofs of His revelation, namely: divine facts, especially miracles and prophecies which, because they clearly show forth the omnipotence and infinite knowledge of God, are most certain signs of a divine revelation, and are suited to the intelligence of all. Wherefore, not only Moses and the prophets, but especially Christ the Lord Himself, produced many genuine miracles and prophecies; and we read concerning the apostles: "But they going forth preached everywhere: the Lord working withal and confirming the word with signs that followed" [Mk 16:20]. And again it is written: "And we have the more firm prophetical word: whereunto you do well to attend, as to a light that shineth in a dark place" [2Pet 1:19].

Mod: Miracles are wonderful things. Jesus taught that great works could be accomplished by faith, which differs from obedience. Indeed, Jesus is called the Man of Faith because he worked his miracles not by divine power but faith in His Father.

DF: Moreover, although the assent of faith is by no means a blind movement of the intellect, nevertheless, no one can "assent to the preaching of the Gospel," as he must to attain salvation, "without the illumination and inspiration of the Holy Spirit, who gives to all a sweetness in consenting to and believing in truth" (Council of Orange). Wherefore, "faith" itself in itself, even if it "worketh not by charity" [cf. Gal 5:6], is a gift of God, and its act is a work pertaining to salvation, by which man offers a free obedience to God Himself by agreeing to, and cooperating with His grace, which he could resist.

Mod: Faith is a gift from God and the soul must be open to it. In the vernacular of recovery, one must spiritually ”hit bottom.” Penitential practices are designed to engender that experience, but many go through a life in the Church without it, seeking certainty instead of faith, like the Pharisees before them.

DF: Further, by divine and Catholic faith, all those things must be believed which are contained in the written word of God and in tradition, and those which are proposed by the Church, either in a solemn pronouncement or in her ordinary and universal teaching power, to be believed as divinely revealed.

Mod: We must believe the scriptures, but we can look to theologians and scripture scholars, as well as historians and archeologists to enhance our understanding of them and their value in our lives.

DF: But, since "without faith it is impossible to please God" [Heb 11:6] and to attain to the fellowship of His sons, hence, no one is justified without it; nor will anyone attain eternal life except "he shall persevere unto the end on it" [Mt 10:22; 24:13]. Moreover, in order that we may satisfactorily perform the duty of embracing the true faith and of continuously persevering in it, God, through His only-begotten Son, has instituted the Church, and provided it with clear signs of His institution, so that it can be recognized by all as the guardian and teacher of the revealed word.

MOD: The Church is essential in teaching the truth, but it includes the above-mentioned professions that can aid our understanding of the revealed word, including its origins.

DF: For, to the Catholic Church alone belong all those many and marvelous things which have been divinely arranged for the evident credibility of the Christian faith. But, even the Church itself by itself, because of its marvelous propagation, its exceptional holiness, and inexhaustible fruitfulness in all good works; because of its catholic unity and invincible stability, is a very great and perpetual motive of credibility, and an incontestable witness of its own divine mission.

MOD: The Church cannot use hubris to justify a monopoly on truth, especially among those who know its bloody history of war, inquisition and child abuse.

DF: By this it happens that the Church as "a standard set up unto the nations" [Is 11:12], both invites to itself those who have not yet believed, and makes its sons more certain that the faith, which they profess, rests on a very firm foundation. Indeed, an efficacious aid to this testimony has come from supernatural virtue. For, the most benign God both excites the erring by His grace and aids them so that they can "come to a knowledge of the truth" [1Tim 2:4], and also confirms in His grace those whom "He has called out of darkness into his marvelous light" [1Pet 2:9], so that they may persevere in this same light, not deserting if He be not deserted. Wherefore, not at all equal is the condition of those, who, through the heavenly gift of faith, have adhered to the Catholic truth, and of those, who, led by human opinions, follow a false religion; for, those who have accepted the faith under the teaching power of the Church can never have a just cause of changing or doubting that faith. Since this is so, "giving thanks to God the Father, who hath made us worthy to be partakers of the lot of the saints in light" [Col 1:12], let us not neglect such salvation, but "looking on Jesus, the author and finisher of faith" [Heb 12:2], "let us hold fast the confession of our hope without wavering" [Heb 10:23].

Mod: Faith is a wonderful thing and includes the responsibility of questioning rather than using loyalty to not question when questioning is necessary, as in what is meant by adultery after divorce or what is the nature of original sin if there were no first parents or whether the sacrifice of Christ was transactional or the divine seeking to experience our human emptiness from sin. Real faith does not run from doubt, it embraces its challenge.

Chap. 4. Faith and reason

DF: By enduring agreement the Catholic Church has held and holds that there is a twofold order of knowledge, distinct not only in principle but also in object: (1) in principle, indeed, because we know in one way by natural reason, in another by divine faith; (2) in object, however, because, in addition to things to which natural reason can attain, mysteries hidden in God are proposed to us for belief which, had they not been divinely revealed, could not become known. Wherefore, the Apostle, who testifies that God was known to the Gentiles "by the things that are made" [Rom 1:20], nevertheless, when discoursing about grace and truth which "was made through Jesus Christ" [cf. Jn 1:17] proclaims: "We speak the wisdom of God in a mystery, a wisdom which is hidden, which God ordained before the world, unto our glory, which none of the princes of this world know. […] But to us God hath revealed them by His Spirit For the Spirit searcheth all things, yea the deep things of God" [1Cor 2:7,8,10]. And the Only-begotten Himself "confesses to the Father, because He hath hid these things from the wise and prudent, and hath revealed them to little ones" [cf. Mt 11:25]

MOD: That some matters are only known by revelation there is no doubt. Determining which are and which are not requires the tools of scholarship listed above. The Church has nothing to fear from these and everything to gain unless it holds fast to interpretations that ignore simple reality.

DF: And, indeed, reason illustrated by faith, when it zealously, piously, and soberly seeks, attains with the help of God some understanding of the mysteries, and that a most profitable one, not only from the analogy of those things which it knows naturally, but also from the connection of the mysteries among themselves and with the last end of man; nevertheless, it is never capable of perceiving those mysteries in the way it does the truths which constitute its own proper object. For, divine mysteries by their nature exceed the created intellect so much that, even when handed down by revelation and accepted by faith, they nevertheless remain covered by the veil of faith itself, and wrapped in a certain mist, as it were, as long as in this mortal life, "we are absent from the Lord: for we walk by faith and not by sight" [2Cor 5:6 f.],

MOD: There are some divine mysteries we will never know, but others may reveal themselves in time and faith, especially when aided by not only reason, but the evidence of the scientific and social arts. Indeed, prophetic mysteries shall be revealed with time when these prophesies have been fulfilled. There are other areas where we can only assert a common belief, which cannot come close to the actual truth but can bring us closer to God and each other. This is especially true of the ”Orthodox” Councils of Ephesus, Nicea and Calchedon.

DF: But, although faith is above reason, nevertheless, between faith and reason no true dissension can ever exist, since the same God, who reveals mysteries and infuses faith, has bestowed on the human soul the light of reason; moreover, God cannot deny Himself, nor ever contradict truth with truth. But, a vain appearance of such a contradiction arises chiefly from this, that either the dogmas of faith have not been understood and interpreted according to the mind of the Church, or deceitful opinions are considered as the determinations of reason. Therefore, "every assertion contrary to the truth illuminated by faith, we define to be altogether false" [Lateran Council V].

MOD: The Church does not have a monopoly on knowledge or reason nor can it ignore those instances where established doctrine has been overcome by the advancement of knowledge. The Church must then humbly seek new answers which conform to the revealed truth and to the newly discovered realities. These realities are not deceit and cannot be ignored because they conflict with established teaching. Rather, misunderstanding revelation can be corrected using the human and natural sciences and the revelation itself. The understanding of the Eden story is a prime example. The Eden myth is now known to be an adaptation of the Sumeric story and is so written that the Original Sin therein contained can be seen as blame, which is not the disobedience of one Man but of all. The solution is not only obedience, but to obey the command to forgive so as to be forgiven. Inspiration comes to all ages, including this one.

DF: Further, the Church which, together with the apostolic duty of teaching, has received the command to guard the deposit of faith, has also, from divine Providence, the right and duty of proscribing "knowledge falsely so called" [1Tim 6:20], "lest anyone be cheated by philosophy and vain deceit" [cf. Col 2:8]. Wherefore, all faithful Christians not only are forbidden to defend opinions of this sort, which are known to be contrary to the teaching of faith, especially if they have been condemned by the Church, as the legitimate conclusions of science, but they shall be altogether bound to hold them rather as errors, which present a false appearance of truth.

Mod: This is by far the sloppiest proof texting ever. These scriptures condemn trading faith and revelation for the philosophies of the ancient world, a call that was ignored when doctors of the Church embraced a stoic understanding of sexuality. This paragraph is not demanding faith, it is demanding loyalty. Faith moves forward to see how the natural and human sciences can magnify faith when the opinions of prior theologians and clergy have been found to be incomplete. To say this understanding in the past must always govern is the height of pride. This pride in a stoic sexual philosophy is indeed ruining the Church because it is false.

DF: And, not only can faith and reason never be at variance with one another, but they also bring mutual help to each other, since right reasoning demonstrates the basis of faith and, illumined by its light, perfects the knowledge of divine things, while faith frees and protects reason from errors and provides it with manifold knowledge. Wherefore, the Church is so far from objecting to the culture of the human arts and sciences, that it aids and promotes this cultivation in many ways. For, it is not ignorant of, nor does it despise the advantages flowing therefrom into human life; nay, it confesses that, just as they have come forth from "God, the Lord of knowledge" [1Sam 2:3], so, if rightly handled, they lead to God by the aid of His grace. And it (the Church) does not forbid disciplines of this kind, each in its own sphere, to use its own principles and its own method; but, although recognizing this freedom, it continually warns them not to fall into errors by opposition to divine doctrine, nor, having transgressed their own proper limits, to be busy with and to disturb those matters which belong to faith.

Mod: The Church cannot on one hand admire science and with another signal halt. It is not Truth that is threatened by science, but dogmatic pride and even continuing error. Limiting inquiry is no alternative. Rather, working with the natural and human sciences can help the Church perfect itself. These sciences are useful in identifying what is essential truth and what is clerical artifice, such as our Medieval system of governance, which is of man, not God. Indeed, Jesus commanded humble leadership, not of lording power over the Church as the gentiles do.

DF: For, the doctrine of faith which God revealed has not been handed down as a philosophic invention to the human mind to be perfected, but has been entrusted as a divine deposit to the Spouse of Christ, to be faithfully guarded and infallibly interpreted. Hence, also, that understanding of its sacred dogmas must be perpetually retained, which Holy Mother Church has once declared; and there must never be recession from that meaning under the specious name of a deeper understanding "Therefore […] let the understanding, the knowledge, and wisdom of individuals as of all, of one man as of the whole Church, grow and progress strongly with the passage of the ages and the centuries; but let it be solely in its own genus, namely in the same dogma, with the same sense and the same understanding.'' [Vincent of Lerins, Commonitorium, 23, 3].

Mod: Many philosophic inventions of the human mind have become doctrine and even dogma. Unlike revelation, they can certainly be revised and improved upon. Indeed, when they have mixed origins in classical philosophy, they have to be. Such philosophy is in places denigrating to women and to the married state. The natural and human sciences are useful in examining these interventions and thereby helping to perfect the Church. The rare sexual orientation of the hierarchy, which has long been unmentioned but below the surface, asexuality, must be revealed and its influence on the doctrines of the Church laid bare, from original sin to sacred continence to the insistence on universal chastity that lies at the heart of Humanae Vitae, to the fail to ordain women. It is not Revelation that modernists attack, but the smug clericalism that gives rise to the cynics proof of God, that the Church must be true because it has survived two millennia of hierarchs who have done their best to kill it. It is a miracle that any of us find Grace.