http://video.pbs.org/video/1650808108/
This blog was inspired by a pbs video documentary i recently saw online. I have been watching many documentaries recently as I have found them to be an easy way to explore and learn about something new in a short time span without the tediousness and exhaustiveness of reading books. There a good way to relax at night when ones body mind is too exhausted to venture into a taxing activity. I think this documentary titled “Fixing the Future” will serve as a good way of easing into a conversation about alternative methods to creating and building a healthy more stable economy with well paying jobs and prosperity based on a more grass roots and democratic framework then today’s modern capitalism. These alternatives are in no way advocating communism but as you will clearly see are capitalistic but in a more just and egalitarian way. They center around the community and small business projects and can be compared to what John McCain and Republicans advocated during elections as what town hall meetings are to politics and government. These institutional alternatives take power and give it directly to the people who best know what there communities need. I have always disliked huge hierarchical institutions with large bureaucracies that are out of touch with the rest of society and whose enormous size have served to promote incompetence, greed, and inhibit good. this was clearly seen in the most recent financial crisis were the entire financial sector brought about its own collapse and a recession that left millions of innocent people, who had nothing to do with the crisis, jobless and financially vulnerable. These large financial institutions/banks had evolved to serve one purpose only; profits. They competed to take on excessive risk and leverage so that there profits were astronomical. Now it’s pretty obvious that excessive risk and leverage is a bad thing and its evils were apparent in the resulting collapse and crippling of many of these institutions. But you may say what is wrong with profit, and to that i saying nothing is wrong with it. Its flaws come about with the way it is made and how it is distributed afterward. Currently a lot of it is based on the exploitation of labor and the monopolization of resources and power. Prior to, during, and after the recession these institutions made huge profits. profits can serve many purposed it can be re-invested back into the company to reduce the amount of loans needed to finance its expansion or routine transactions like cost of goods or payroll; they can go to charities or the community to finance projects or other businesses, they can be paid as taxes to the government where they will serve the public good or at least help pay down the deficit; they can be saved for a rainy day when a crisis or downturn comes along; they can be given to investors as interest or dividends; or they can be used to pay employees the full market value of their labor. Modern day capitalism, for the most part, uses its profits for the last two things. While investors are sometimes critical towards the success of a business their role can be largely diminished if profits were re-invested into the company from the beginning, as some corporations like Google and Microsoft do. Investors do little more than provide money, they do not assist in the creation of products, their distribution, or management of the business, they do little to no work yet they are compensated tremendously. Pay increases and bonuses are only logical when there are excess profits but these profits have been going to a relatively few who are on top. The rest of the labor force, who with out them the business could not function, is not acknowledged but during a downturn in the economy they are the ones who suffer the most despite not having received the benefits of the boom. Executives can afford to go years unemployed because they got paid millions by simply working one year. This occurs regardless of whether or not the year was profitable or incurred major losses. On top of that they received golden parachute packages or severance pay that is agreed upon at the initial contract before the executive is even hired. They are in no way performance based and do not take into account the conditions the executive will me dismissed whether it be incompetence or retirement or to go to a rival company, it is all treated the same. The average American receives no such treatment or special privileges. But who pays for the bailouts and stimulus money if not the middle and working class tax payers? The rich and their corporation’s don’t pay a higher tax rate or penalties for the messes they make. If the profits they made were either paid out fairly to every employee in the firm or taxed to provide social safety nets or goods, elites would become more cautious and not make such unnecessary and stupid decisions. They would be more invested in the financial soundness of their institution if their compensation directly correlated with the ongoing success of there company. Middle class and working Americans would be better able to weather crises and not suffer unnecessarily.
One alternative to the structure of modern businesses it that of the cooperative. The first successful US cooperative was organized in 1752 by Benjamin Franklin when he formed the the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Cooperatives are formed when people band together to form a business entity that serves the needs of the collective membership, customer base, employees or another user group. Today’s G 20 group can be described as a cooperative. Like many businesses cooperatives are constantly reinventing themselves to ever-changing market conditions, and continually evolve to meet their member’s needs. In a cooperative every member has an equal say and the business is there for the sole purpose of serving each individuals needs equally, not only those of the few. The management structure thus is not vertical as in traditional firms but horizontal. A vertical hierarchy creates class distinctions, conflicting interests, and concentrates power and influence along with compensation among the top. A horizontal management structure delegates and distributes tasks and resources among everyone. They involve open group discussions, free flow of information and communication among all parties involved, widespread participation in the decision-making process and thus ownership by every individual of the outcome and consequences, and a fair compensation system. When every one is given a voice and the opportunity to express there views and process may take longer but the end result will inevitably be better. Different tasks are done by rotating the individuals who perform them and allowing everyone to take part in them and learn. Certain positions will be elected and decided by members. Every member will be informed of what is occurring, the firm is completely independent and unique. Crises and bankruptcies will inevitable be diminished as they effect everyone equally and the success of the firm relies on the health of the community. Every member has a stake in the ongoing success of the business, and power is distributed equally.
In order to survive these institutions need to be provided with the proper legal framework that reinforces there existence. There sovereignty, contracts, and rights must be protected. Rules and legal procedures for settling disputes among and within them, and for dealing with bankruptcies must be created.
This blog was inspired by a pbs video documentary i recently saw online. I have been watching many documentaries recently as I have found them to be an easy way to explore and learn about something new in a short time span without the tediousness and exhaustiveness of reading books. There a good way to relax at night when ones body mind is too exhausted to venture into a taxing activity. I think this documentary titled “Fixing the Future” will serve as a good way of easing into a conversation about alternative methods to creating and building a healthy more stable economy with well paying jobs and prosperity based on a more grass roots and democratic framework then today’s modern capitalism. These alternatives are in no way advocating communism but as you will clearly see are capitalistic but in a more just and egalitarian way. They center around the community and small business projects and can be compared to what John McCain and Republicans advocated during elections as what town hall meetings are to politics and government. These institutional alternatives take power and give it directly to the people who best know what there communities need. I have always disliked huge hierarchical institutions with large bureaucracies that are out of touch with the rest of society and whose enormous size have served to promote incompetence, greed, and inhibit good. this was clearly seen in the most recent financial crisis were the entire financial sector brought about its own collapse and a recession that left millions of innocent people, who had nothing to do with the crisis, jobless and financially vulnerable. These large financial institutions/banks had evolved to serve one purpose only; profits. They competed to take on excessive risk and leverage so that there profits were astronomical. Now it’s pretty obvious that excessive risk and leverage is a bad thing and its evils were apparent in the resulting collapse and crippling of many of these institutions. But you may say what is wrong with profit, and to that i saying nothing is wrong with it. Its flaws come about with the way it is made and how it is distributed afterward. Currently a lot of it is based on the exploitation of labor and the monopolization of resources and power. Prior to, during, and after the recession these institutions made huge profits. profits can serve many purposed it can be re-invested back into the company to reduce the amount of loans needed to finance its expansion or routine transactions like cost of goods or payroll; they can go to charities or the community to finance projects or other businesses, they can be paid as taxes to the government where they will serve the public good or at least help pay down the deficit; they can be saved for a rainy day when a crisis or downturn comes along; they can be given to investors as interest or dividends; or they can be used to pay employees the full market value of their labor. Modern day capitalism, for the most part, uses its profits for the last two things. While investors are sometimes critical towards the success of a business their role can be largely diminished if profits were re-invested into the company from the beginning, as some corporations like Google and Microsoft do. Investors do little more than provide money, they do not assist in the creation of products, their distribution, or management of the business, they do little to no work yet they are compensated tremendously. Pay increases and bonuses are only logical when there are excess profits but these profits have been going to a relatively few who are on top. The rest of the labor force, who with out them the business could not function, is not acknowledged but during a downturn in the economy they are the ones who suffer the most despite not having received the benefits of the boom. Executives can afford to go years unemployed because they got paid millions by simply working one year. This occurs regardless of whether or not the year was profitable or incurred major losses. On top of that they received golden parachute packages or severance pay that is agreed upon at the initial contract before the executive is even hired. They are in no way performance based and do not take into account the conditions the executive will me dismissed whether it be incompetence or retirement or to go to a rival company, it is all treated the same. The average American receives no such treatment or special privileges. But who pays for the bailouts and stimulus money if not the middle and working class tax payers? The rich and their corporation’s don’t pay a higher tax rate or penalties for the messes they make. If the profits they made were either paid out fairly to every employee in the firm or taxed to provide social safety nets or goods, elites would become more cautious and not make such unnecessary and stupid decisions. They would be more invested in the financial soundness of their institution if their compensation directly correlated with the ongoing success of there company. Middle class and working Americans would be better able to weather crises and not suffer unnecessarily.
One alternative to the structure of modern businesses it that of the cooperative. The first successful US cooperative was organized in 1752 by Benjamin Franklin when he formed the the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Cooperatives are formed when people band together to form a business entity that serves the needs of the collective membership, customer base, employees or another user group. Today’s G 20 group can be described as a cooperative. Like many businesses cooperatives are constantly reinventing themselves to ever-changing market conditions, and continually evolve to meet their member’s needs. In a cooperative every member has an equal say and the business is there for the sole purpose of serving each individuals needs equally, not only those of the few. The management structure thus is not vertical as in traditional firms but horizontal. A vertical hierarchy creates class distinctions, conflicting interests, and concentrates power and influence along with compensation among the top. A horizontal management structure delegates and distributes tasks and resources among everyone. They involve open group discussions, free flow of information and communication among all parties involved, widespread participation in the decision-making process and thus ownership by every individual of the outcome and consequences, and a fair compensation system. When every one is given a voice and the opportunity to express there views and process may take longer but the end result will inevitably be better. Different tasks are done by rotating the individuals who perform them and allowing everyone to take part in them and learn. Certain positions will be elected and decided by members. Every member will be informed of what is occurring, the firm is completely independent and unique. Crises and bankruptcies will inevitable be diminished as they effect everyone equally and the success of the firm relies on the health of the community. Every member has a stake in the ongoing success of the business, and power is distributed equally.
In order to survive these institutions need to be provided with the proper legal framework that reinforces there existence. There sovereignty, contracts, and rights must be protected. Rules and legal procedures for settling disputes among and within them, and for dealing with bankruptcies must be created.
These alternatives and reforms to mainstream capitalism are completely American. They are based on the founding values of democracy, equal representation in not just the political sphere but the economic sphere, greater equality of opportunities, the pursuit of happiness, and fair justice. They are not socialist or anarchists economic systems but capitalistic with open and voluntary memberships. They are truly American and will contribute to the strength and health of the US economy. They create and maintain sustainable jobs, generate wealth, improve the quality of life and working conditions of worker-members, give employees democratic self-management, and promote community and local development. The present form of capitalism has time and time again failed to provide these things.
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