← Economic Update with Richard D. Wolff
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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Incomes, jobs, debts, the future for our kids, all of that. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and so I hope I've learned something also about how to present it that can make sense of the economic events we depend on and live through week to week, year to year. I want to begin by a closing chapter, if you like, on something we've been discussing for a while on this program. This has to do with the initiative taken by the people of California, which reached a peak this last week when Governor Jerry Brown signed into law AB249. A new law goes into effect on January 1, 2018. It will require that all paid advertisements for political candidates, for parties, for ballot measures have to identify who the major donors were that made those paid advertisements possible. The whole logic of it is that the people who vote should know who's paying for the advertisements that flood our airwaves in the weeks before our elections. It's a basic piece of information. The other 49 states are behind California on this. And it is the hope of all of us who've watched this struggle over the years that it took to recognize that the rest of the country should follow and to recognize that this is only the first step. There should be many more constraints on and exposures of the enormous influence that money has in the politics of the United States and that too little has been known about it. So this is an important step. Several of the updates I'm going to be talking with you about today have to do with corporate misdeeds. Why am I talking about them? Well, there are three reasons. First, there's more of them than I remember seeing crammed into short periods of time. Number two, they're really big. They affect millions of people in dangerous ways. But the third reason is the one I'm most concerned about. We take for granted that the things we need and depend on are going to be managed in an honorable, safe and useful way by the entity we call the capitalist corporation. And in recent weeks and months, we have been given evidence after evidence that putting trust in those institutions is a mistake. They are not trustworthy, not all of them, of course, but enough of them to raise a fundamental question about whether we ought to organize the production of goods and services in the capitalist form. Small groups of people, major shareholders, boards of directors, making all the key decisions, being driven by profit maximization as the famous bottom line. Are they making decisions about Profits that also happen to be good for the rest of us? Or are they making decisions about profits even when they are bad for the rest of us? I'm now going to give you in the course of the next few minutes several examples that ought to make all of us stop and think about the economic system we live in. I'm going to begin with an obscure example, but an important one. This has to do with something called Monarch Airlines, a British airline company that abruptly announced a couple of weeks ago that it was bankrupt. Did the executives, did the board of directors know that they were in financial trouble? Of course. Did they make that clear to the public? Of course not. If they had done so, the hundred thousand people stranded when they simply stopped running their airplanes would of course gone elsewhere for their air travel. So they didn't do that. That was good for them to profit another few months and weeks. But of course it wasn't good for the stranded travelers. Hundreds of thousands of people inconvenience, stranded, separated from God knows what kind of family emergencies and business requirements for the convenience of the profits of an airline company. And that means its major shareholders and its top executives. 300,000 people were holders of tickets on Monarch Airlines in the months ahead, on top of the hundred thousand that were stranded. Where's the capitalist efficiency in this story? There isn't any. This is an example of the dangers that we face as a people. If we allow something like air travel to be operated by a private company seeking to make money, and if and when that company can't or won't take take the steps we need because they conflict with what's good for them, it's clear which way they go. Let me offer you another example. This one in the United States, one of the most important credit companies in the country, a company whose job it is to keep track of how credit worthy you and I are. Do we pay our debts, do we pay on time, what is the record of our payments and so forth. And that's very useful to the business community because it lets them know to whom they should issue a credit card, to whom they should not, how much credit to allow the person, how much not. You get the picture. The name of the company, Equifax. Very important to put names on this. It's one of the biggest three credit card companies in the world. Well, here's what they did. They found out earlier this year that they had a problem with their system of record keeping their computer files. There was a way for a hacker to get into them. They could have, and they should have patched that problem to avoid a hacker getting in. There were at least some weeks or months between the time they found out and the time they did anything about it. And in that interval, when it wasn't yet a profit driven decision to fix things, a hacker got in. What did the hacker or hackers get ready? 153. In that neighborhood, million of our accounts, our names, our Social Security numbers, our credit histories are now public knowledge. 153 million, ladies and gentlemen, that's half the population of the United States has been compromised. By what? By a private capitalist corporation whose board of directors, 15, 20 people didn't see fit to fix the problem immediately. Maybe it's expensive, maybe they were looking for a cheaper offer. I really don't care and neither should you. Private profit companies did something that compromised the credit, the privacy, the very identity of half the people in the United States. Leaving our business, leaving our affairs in the hands of private companies, Not a good idea. And that reminds me of another companyyahoo. Yahoo. They admitted that their records were hacked. When they first admitted it some time ago, they said 1 billion people's accounts had been hacked. In other words, Yahoo didn't spend the money. Hire the people to make sure this didn't happen. Would have cost them a bundle. So they didn't do it. And they announced over the last few weeks that there had been an error. It wasn't 1 billion, it was 3 billion. There's nothing I can say other than to remind you that leaving important issues in the hands of private profit driven capitalists is not the best idea for how to proceed. But I don't mind pushing the envelope a little with you. So let's continue and talk about more examples. The next one is Johnson and Johnson, one of the largest pharmaceutical and and medical device companies in the world. It produced something a while ago, or rather its subsidiary with the wonderful name Ethicon, playing on the word ethical, which is real close. Ethicon, a subsidiary produced something called a vaginal mesh implant. And it turns out that this device was a more modern, a newer version of older devices that were really working pretty well. But the advertisement was that here's a new product that works better than the old one, even though the evidence now suggests it doesn't. But it is very common for pharmaceutical companies to come up every few years with a better version because everyone goes out and buys that and they can price it accordingly and make more money. The problem here was that the newer version hurt people, hurt women, because it was made for women. And one of them went to court and there was a trial. And when there's a trial, there's a record. And I can bring you the results of the record. First, the plaintiff, the woman hurt by this profit driven maneuver won a $57 million award because the jury and the judge found that the damage was severe. And that. I'm quoting now from one of the news reports, the product was less effective, had a higher failure rate than earlier products. Wow. They could have, they should have known. You're supposed to test these things, you're supposed to be honest and test them widely before you introduce them, because this sort of story can happen. Johnson and Johnson is a very profitable big pharmaceutical company and it proved to be an untrustworthy producer of these devices. Let's go back to England for yet another example. The largest supplier of supermarket chicken in Britain is called the Two Sisters Food Group. And they were, unfortunately, the object of an effort by newspaper and media reporters to film what goes on inside the chicken processing plants operated by the Two Sisters Food Group. And there they made video recordings of 2:1 pieces of chicken falling off the assembly line onto the dirty floor, being lifted up by the workers and put right back on the assembly line. The second I found even more distressing, they have videos of workers changing what are called the kill dates. The, the dates upon which the chickens in question were. What's the polite way to say this? Killed. That's why it's called a kill date. They made the kill dates later so that they could sell to the public older chickens. And that's why, of course, kill dates are mandated by law. Okay, what does this story tell us? 2 Sisters Food Group is a capitalist corporation seeking to maximize profits. That's what all these corporations do. That's what they learned how to do at business school. The top executives, that's what they're paid to do. That's what they get bonuses for doing. So that's what they do. They maximize profits. It would hurt profits if the piece of chicken that fell on the floor was. Was thrown out. It would hurt profits if they couldn't sell parts of chickens or whole chickens because they were too old. Too much time had elapsed since they were killed, so they fixed it. It's good for profits, not good for your tummy. Last example I want to stress today has to do with a literal epidemic. This one is the epidemic of people overdosing on opioids. It's very famous. It's getting a lot of attention now, even from our president. 64,000 people last year died in America in one year of overdoses of these drugs. Most of these people get these drugs through prescriptions. In other words, there are drug companies that are producing these drugs and then through intermediaries, distributing them to pharmacies, to doctors, to clinics and so on in the normal way this business is done. But this isn't a normal problem. The drugs in question, OxyContin is a famous example. And the other variations on that drug, these drugs are the ones being used by people to overdose, wounding themselves, damaging their brains, killing themselves. The state of Washington has been so affected by this crisis as have many states, that the state of Washington went a little bit further and over the last couple of weeks initiated publicly a lawsuit against a number of of pharmaceutical companies, in particular Purdue Pharma, one of the largest ones, that produces and distributes. This is not the only lawsuit. I'm going to read you a list of other states that have also initiated lawsuits against pharmaceutical companies. Louisiana, West Virginia, New Mexico, Oklahoma, Mississippi, Ohio, Ohio, Missouri, New Hampshire and South Carolina, and I might add several cities and counties have also initiated lawsuits. And the lawsuits all have variations on the following assertion. One, that the pharmaceutical companies under reported under advertised the addictive nature of what was marketed as a painkiller. It's one thing to want to kill your pain. Understandable. It's another thing not to be told that the mechanism, the medicine you're using to kill the pain risks giving you a bigger problem than the pain was that you were trying to kill. Number two, it was asserted in various ones of these law cases that these companies were clearly aware when a particular doctor or a particular clinic or a particular drugstore suddenly went from ordering 5,000 pills per month to distribute to their customers to doing five times that or ten times that or some other explosive that should have been a red flag. It would be for any normal, reasonably honest human being. It's a sign somebody should be checking into, making sure that this is not becoming an illegal way of distributing these drugs. And the argument in these lawsuits is these companies therefore knew that they were selling these drugs in ways that would be damaging to people. Did they do what they could have and should have? No. That's why they're being sued by all these states and cities and counties. Well, why didn't they? Well, let's be honest. They were selling at a profit pills. That's what they do. And they didn't want to hurt their profits. Their profits were exploding as millions and millions of Americans in difficulty for the very reasons of the economic crisis. We talk about on this program, trying to cope with poor wages, with jobs that are insecure, with jobs that don't have the benefits they once have, trying to manage that, they become dependent on these drugs that are highly addictive. Well, it was profitable to sell the drugs. It may have killed a lot of people, but it was profit. There's no nice way of saying this when you weigh killing people on the one hand and the profits of your own company on the other. These companies made a choice. The city of Seattle is suing. And it's not just suing Purdue. It is suing Teva Pharmaceuticals, Johnson and Johnson again, Endo International and Allergan. It's important that you know the names because every one of those is is a large capitalist corporation making money off of something that isn't only not so good for the rest of us. It's deadly. And if there's a clash between profits and deadly, do we really want to leave the decision in the hands of those who earn their profits off of this? No. What other answer could we have? I'm still not done. And if it's taking all of our time today, the point is important enough. Over this last week, a Japanese steel company, one of the largest steel producers in the world, been around for many decades. It's called Kobe Steel, K O B E. They have now revealed and admitted that they falsified information about a number of the metals that they produce and sell. Now here comes the part that should scare you. To whom did Kobe Steel sell the steel and the copper and the other metals? To railroad companies, to airline companies, and to automobile companies, among others, Raising the question, which is a very hot topic in Japan right now, are we riding in cars and trains and airplanes whose metal isn't up to snuff? Because what the Kobe Steel Company has admitted to doing is falsifying the data about the strength and quality and components of of the metals they were selling. Wow. New York Times. Last week we made a report that Nissan Motors also falsified data about its cars and had to recall 1.2 million vehicles. These stories never stop, friends. And therefore, there's a larger message. Something is wrong. Putting our confidence and faith in capitalist enterprises driven by profits as their bottom is a really bad idea. And the time has come to face it. Before I complete today's first half of our program, I want to remind you we maintain two websites that I invite you to make use of, to partner with us, to use as a way of talking with other folks about what this program teaches and what this program hopefully means to you. The first is rdwolf with two Fs.com and the second one is democracyatwork.info. that's all one word, democracyatwork.info to my listeners. Let me also remind you that you can see a televised version of this program simply by going to patreon.com P A T R E O-N patreon.com economicupdate Let me urge you to make use of of our websites, of our program as a way to partner with us, to spread the word, to make more people aware of the very things we're trying to articulate and clarify on this program. So let me go back with a couple more examples to drive the point home. Edward Lampert, a former Goldman Sachs banker, became the owner a few years ago of what was left of the Sears Roebuck Company, a company which has been iconic in the American countryside for many, many decades. It has come upon hard times and Mr. Lampert, an ex banker, saw an opportunity. He bought it cheaply and quickly thereafter merged it with another giant retailer that has had trouble, Kmart, the former Kresge. If you go back far enough this last couple of weeks, he announced he's closing all the remaining Sears stores in Canada, making 12,000 people unemployed in Canada. The shares of stock went from a high of $170 a share to the current price, which is below $8 a share. It is a disaster. Mr. Lampert has made all kinds of money along the way because Sears was owner of land where it was located that had become valuable. It had other properties. It could be dismantled in a profitable way. Along the way, of course, tens of thousands of Sears employees lose their jobs. The 12,000 in Canada, just the latest installment. But there's worse. Many Sears Roebucks were the anchor of a downtown shopping center. They were the anchor of a mall located somewhere. They were the reason people went to the mall. And then they were customers of the little restaurant, the little card shop and the other things that were in the mall. If you lose the Sears, if the Sears goes down, it takes the other stores and it takes the whole community down with it. Should this decision to destroy this enterprise have been made by a few individuals with Mr. Lampert profitable for them, a disaster for others? This is not the way to organize matters. Leaving empty malls, leaving destroyed communities. This could have and should have been handled in a better way. Maybe not so profitable, but. But better for the mass of people that were injured. Again, it's the same story. My last example that I'll have time for. This has to do with the endowments of rich universities. This time of year they announce how well their endowment is. Let me be clear that you all know what an endowment is, fancy word for wealth. It's the stocks and bonds in real estate a university accumulates over years that it exists. Donations from alumni, fundraising efforts they have and so on. They accumulate wealth and that makes income which they use to run the university. Over the last year, here's how well these endowment funds did. They pay huge bucks to professionals to make money with the money they've accumulated. Dartmouth College leads the pack. This last year their endowment went up 14.6%. Yale was disappointed, its only went up 11.3%. And Harvard did the worst. Even though it's got the biggest endowment, it only went up 8.1%. Why do I tell you this? Because this is money making money. The people of this country who work did not enjoy increases in their wages and salaries over the last year anything like 14% or 11% or 8%. You only got that kind of return if you have enough money to make investments which the vast majority of Americans don't have. So we have to face the reality. Over the last year when we were told there's a great recovery, the people who were the richest, the institutions that were the richest, like those universities I just named, they became much richer than the rest of us. The gap between rich and poor is getting much larger. No one is preventing that. Nothing is stopping it. A capitalist system that works as untrustworthy a set of results as I've reported to you, and that we conclude is making inequality worse is a system that could be questioned, challenged and debated. It's long past time that we do that and make that part of the national conversation about our present and even more about our future. We've come to the end of the first half of Economic Update for today. Please stay with us. After a short interlude, we will be back and we will have an interview that I think you will find very interesting and important.
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I knew our boy way back when his name was Bobby and then he asked my daddy if I could go downstairs but he cannot make a pass and tell his elbow from ass he was completely inept at romance and oh Bobby well it's so painful to watch ya well in a crowd I could spot you oh Bobby, you'll never nail it yeah, what a spectacular failure. He's got a buddy named Jack who likes to take his fact that he and Bobby have all of the power but don't believe what he said Cuz chest on something and Bob and Jack play grab ass in the shower. Oh Bobby, you play out every delusion. You're better off in seclusion. Oh Bobby, I'm never a failer. What a spectacular failure.
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Welcome back friends to the second half of Economic Update for today. In this second half, I am very pleased to welcome Emma Yora. And even before I introduce her, let me thank you for coming today. Emma Yora is a cooperative development specialist. She works at the center for Family Life in Sunset Park, Brooklyn, New York. This is an institution that incubates, that starts and supports majority women owned immigrant worker cooperatives. She worked there with a team to develop up and Go, the world's first app for booking services from cleaning cooperatives. In her nine years of experience, she has also worked with cooperative finance, rural cooperative development, and post disaster cooperative development. She is currently undertaking a master's degree in social economics and Cooperative Business Management at the Mondragon University in Spain. In short, Emma is a specialist and an expert on building, supporting and growing worker co ops, a new kind of business enterprise. And that's why she's talking with us today. Welcome.
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C
Thank you so much. Thank you for having me.
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A
Okay, let's start with a little definition because I know a lot of people need it. The word cooperative covers lots of different things. Food co ops and farmer co ops and worker co ops. Can you give our listeners, our viewers, some sense of the range and the particular one you're focused on?
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C
Absolutely. And I think what's interesting is a lot of people may never have even heard of cooperatives. And I'm always really excited to have the opportunity to talk about them because it feels like I'm delivering good news in a time when there's a lot of bad news. But what's wonderful about cooperatives is they literally can cover every part of the economy. There is no economic activity that can't be done cooperatively. So people are familiar, as you say, with different types of cooperatives. A lot of people, when they think of cooperatives, at least here in the United States, think about food cooperatives or maybe in New York City, particularly housing cooperatives. Those are both consumer cooperatives where the people who are using and consuming the services of the cooperative are the owners of that entity. I myself live in a housing cooperative that was built by Finnish immigrants 100 years ago in New York City. Worker cooperatives, on the other hand, are an entity where the people who are doing the work of a business. So for example, if it's a house cleaning business, they are the Ones cleaning the houses, cleaning the stoves, cleaning the toilets. They are also the people making decisions about how the company is governed, controlling what happens to the profits, setting the structures, setting the payroll, setting everything about that business.
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A
And they do that collectively, exactly democratically.
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On a one worker, one vote basis.
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So all the decisions, just because it's so important, all the decisions that in a regular capitalist business are basically made by the board of directors, the mucky mucks at the top. That's not the way it's done. Instead, the workers themselves directly, democratically make those decisions by discussing and debating, probably for long hours, how to do it. It's really a radically different way of organizing business.
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C
It's definitely a radically different way. And we get a message in our society that some people can't be entrepreneurs, some people can't run their own businesses. Some people are going to spend the rest of their lives in a job with no growth and no development and no leadership possibilities for them. They're going to just, for example, clean houses for the rest of their life. That's what our current economic system says. When we look at cooperative development, we're challenging that. We're saying, yes, they can, and we have proof. We've been doing this for 11 years. We're working with over 280 worker owners. Most of them have very little formal educational background and they are running these businesses democratically. And what's interesting is that when it's a business and you have to use democracy to run the business, sometimes you get to a decision faster than you were, than you would if it was a different kind of democratic decision, because you need to get the job done.
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A
So tell us a little bit about some of these businesses. Give us a feeling. Pick a few examples that you think would give us a sense of the differences and the way they work.
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C
Absolutely. At my organization, the center for Family Life, we've been incubating cooperatives with mostly immigrants and mostly women, 85% women, 87% immigrants, for 11 years. And it's primarily in the home services sector. So the first cooperative that we incubated 11 years ago is called Sisypuede Women's Cleaning Cooperative. And they started with 13 worker owners and they have grown to have over 80 at this point. And it's been a tremendous experience for them to, for example, be on yelp, in a higher position than some large corporations like Handy, because the quality of the service that they're providing is so much better. We've also incubated childcare cooperatives, pet care cooperatives, handiwork cooperatives. And at this point we're really looking at how do we strengthen and scale that work.
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A
Let me pick up on something. You said that in the cleaning case, they do better quality work as a co op than a top down capitalist enterprise does. How is that? Tell me how that happened. Tell me how they do. How do they achieve that?
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C
Sometimes we call this the cooperative advantage because you have people being involved in their businesses. They have an ownership stake in the business. If the business does well, they profit. If the business does badly, they lose. So sometimes we say they have skin in the game and this means that they want to do a really great job and keep their customers and make sure that the entire operation is working as efficiently as possible because they are the ones who benefit and they are the ones who participate. So it's really unlocking a lot of the assumptions that we see in normal businesses where you think that it's all about driving wages as low as you can get them and getting as much out of people as you can. We see that if you invest in people and make them owners, the whole enterprise can succeed.
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A
Okay, let me switch the focus a little bit. How has being in a cooperative enterprise affected and changed the women that you've come in contact with? In other words, it's one thing to say they do the job and they do it really well. That's very important. But I'm interested also in your take because you've worked so closely. How has it affected the women that come in or the men? It doesn't really matter. I'm interested in the impact on the worker of being in a cooperative environment rather than the usual job.
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C
Absolutely. We've seen, I would say in one word, transformational. We see people who come in, who are oftentimes victims of domestic violence, working in jobs where they are earning very low wages, oftentimes facing wage theft, facing a lot of exploitation, feeling very isolated, they come into the cooperative. The cooperative is able to provide them jobs where they are oftentimes tripling their wages. They have much more flexibility and control over their schedules, which means if they don't want to work after 3pm so they can pick up their kids from school, that's their prerogative. And they can set that as policy in the cooperative. So it makes the business much more suited towards their life. The potential for leadership development in the cooperative is immense because they have to run these enterprises themselves. So they learn and become tremendously talented as managers of these businesses. And the social support in the cooperatives is also really immense. Because like I said, these are people who may be facing different kinds of really hard situations where they're on their own, but in the cooperative, they're finding other women who have gone through similar experiences and finding a path to their own personal empowerment.
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A
So is it fair to say. I mean, I'm an advocate of this, so it's not that I'm neutral, but is it fair to say in your judgment that this is a more humane, a more encouraging, a more development of you as a person work situation than you're likely to find outside of a co op?
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C
Absolutely.
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And that it's intentionally that way?
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C
Absolutely. I think another good example is Cooperative Home Care Association Associates, which is the largest worker co op in the entire country. 2,300 workers, about half of whom are owners. 90% of them are Latina, Caribbean and black women. And they are working in an industry that is typically very bad for workers. They're working as home health care providers. Usually that means you're not getting paid very much, and sometimes you have to work 60 to 80 hours a week just to make a living. And there's no pathway for you to do anything except for that. There's no.
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For the rest of your life.
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C
Exactly. There's no professional development. There's no interest in seeing you become anything else and having that work done. In a cooperative, they're earning. They receive double the compensation of the industry average. They have union benefits. They have the ability to participate in the board of directors of this massive company and really have quite a lot of responsibility. There's ability to participate in different committees through the union structure. It's a totally different kind of ball game and a totally different emphasis. Instead of just sending people to a job as a pawn so they can fulfill a mission, they're really interested in what happens to the workers doing that job.
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A
Do you find that people step up, in other words, even people who come from a family where they never dreamed because their mother and father had no leadership role in the business, so they expected to be a worker all their lives. Do they acquire a feeling, a taste for this? Do you find that the leadership you want emerges if you give folks a chance?
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C
Absolutely. And, you know, we direct a lot of our work to helping people grow and develop that. So we direct a lot of our work to helping people find and develop their inner leadership. And it's incredible what you see people do. They get elected to these leadership roles and they step into it, and all of a sudden they are coordinating incredibly complex jobs. They are running meetings with perhaps hundreds of people in them. This is something most people can't stand up in front of 100 people and say, this is what we should do this year. They're doing it. And it's absolutely like you say, because they have to. And it really makes me believe in the capacity of the human spirit to just rise to the occasion.
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A
Let me ask you now a political kind of question. Assuming everything you've just said is true, why don't we, in your judgment, why don't we see, or how could we hope to see this become a much more widespread phenomenon? It's sort of the naive question, given what you've just told us, why aren't there thousands across the country of worker co ops that would enable everyone to experience in their own personal lives what you've experienced? Because they'd go to a local cleaner who would be a co op or they would go to anybody else. In other words, maybe they put it this way, how does this become a social phenomena rather than the isolated examples, important as they are, that you've told us about?
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C
That's a great question. It's a question that a lot of people have grappled with over time. There's really powerful work being done by a lot of organizations to look at what is the ecosystem that's necessary to have a robust cooperative economy in a certain place. I would start off by talking about what's happening right here in New York City, which is incredibly galvanizing and maybe an example of what can happen if there is interest and investment in this idea.
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A
Tell us a little bit about that. Yes.
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C
In New York City, starting three years ago, the city Council decided to start investing in worker cooperative development. And this was enormous because no other entity of the US government in any of its levels had ever taken an interest in this topic. So it was really pioneering and unprecedented. And over the last three years, they've invested over $5 million in worker cooperative development. And we've seen the number of cooperatives in the city triple and the number of worker owners also grow exponentially. So I think one answer is that this is a sector that's really under invested in and capital would absolutely be first and foremost, perhaps in the elements that are needed. But there's a lot of other pieces as well. When people go to a small business development center or when people go to get an mba, they don't learn about cooperative economics. You have to go out of your way. I'm doing a Master's in Spain, not because I wanted to do a master's in Spanish, but Because there's nowhere to study this topic in the United States.
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A
And they are masters because of their experience at Mondragon. So you're going to the most successful growth of a worker co op probably in the world today. It's extraordinary. And that they maintain a university where they offer this is. I mean, I'm hoping people who are watching and listening think about this, that there is that. But I could just supplement what you're saying. Having been a professor of economics all my life, I'm not aware of any economics department that spends any significant amount of time asking or answering the question how would an economy work that was composed of worker co ops rather than of top down capital? It's as if that isn't in existence. It's as if the only way to think about economics is, is through the lens of capitalism and not through the lens of cooperative. It's extraordinary.
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C
Absolutely. And it's also partially because the actors in the traditional economy have often attacked and taken down successful examples of cooperatives or cooperative economics.
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A
Can you give us a story?
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C
There's examples in Canada where they were able to build a cooperative loan fund of a much larger size than we've seen in a very long time. And essentially the big banks in that area collaborated and colluded to tear it down and they didn't want the competition. Absolutely. And Jessica Gordon Nemhardt has written a wonderful book called Collective Courage where she documents many, many, many cases where cooperatives owned by black people were torn down, attacked, not given a chance to freely participate in the market economy and eliminated because they were seen as a threat to the status quo. So part of the reason that we don't see this more is because we don't know about it. We don't know about it perhaps on purpose because we're not supposed to know about it and because when we are able to succeed, we're often torn down.
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A
Well then let me ask you to speculate that hasn't happened here in New York, or at least less so, so that the examples you just gave us have been able to flower here. Is something changing? Is something happening that might prevent the squashing that you described or how would you account for it?
- [47:06]
C
I would certainly hope so. I think if we look at large examples like cooperative home care associates, they have had to really be very excellent in their performance in order to survive what is a pretty competitive industry. But we do have the support from certain left leaning politicians here in New York City. And I think one other element that gives me hope is, and that is different in the United States than in cooperative movements I've seen in other places is that we're seeing the cooperative element being combined with a real focus on justice that is very broad based. So for example, Black Lives Matter, when they wrote their policy platform, which is very detailed, they included cooperative development as a path for economic justice. And it's specifically laid out there. And then in return, the U.S. federation of Worker Cooperatives issued a statement in support of Black Lives Matter. When we look at the New Economy Coalition, for example, they are explicitly calling out the work to be centered around racial, economic and climate justice. So I believe that if cooperatives can be part of a larger movement to create a better society, that will give them more power when those kinds of attacks come. Because you're not just attacking one little cooperative, you're attacking something that's really part of a bigger picture to create a better world.
- [48:44]
A
Let me pick up on that. Is that why you got involved? I mean, not to turn it too personal, but you're spending a lot of your energy, your time, your brain, your creativity. Why? Why has this got you in a sense?
- [48:58]
C
Yeah. For me, this started when I was 18 and I went to Nicaragua and I experienced extreme poverty for the first time. And I was shocked by it. And I thought to myself, how, how is it that we have places like Nicaragua that are deemed to be a vacuum of wealth, where literally all there is is scarcity, and in other places like Manhattan, there's an overabundance of wealth? And that led me to an economics class in college where the professor said to me or said to the class, the study of economics is the study of who's eating, who's not and why. And I thought to myself, that's what I want to know. I'm going to try and find the answer to this question. And that led me to then to study cooperatives. And I found myself inside of a ceramics factory in Argentina, which was a worker owned factory which was recuperated after their economic collapse. And this was an enormous ceramics factory, the third largest in the whole continent, with 500 worker owners. And I just found myself thinking, this is both. You can have your cake and eat it too. This is productive and just this is efficient and democratic. And what I've been told the whole period I've been studying economics is that you can't have that. It's one or the other. I was like, no, you actually can have both. And from there I was hooked.
- [50:31]
A
It's that famous win win kind of situation. I want to turn back a little Bit to the political, if I can. You mentioned that your hope is that, that co ops and the whole movement for worker co ops can flourish within a larger framework, an alliance, let's say, with racial justice and climate justice. Do you see that coming? Do you see ways of doing that? Is there a reason for viewers, listeners to hope that something like this is gathering steam or gaining momentum or how would you, how would you guess? It's of course the future. But how would you hope this will evolve?
- [51:17]
C
Absolutely. I think first of all, I would say anyone who's hearing or watching this can be part of this. And that is one of the things that can help it grow. And I would encourage people to try and get involved in the cooperative networks that are in their area when I go.
- [51:36]
A
Is there, by the way, a way to do that that you can suggest?
- [51:38]
C
Absolutely. In the United States, I would recommend people go to the United States Federation of Worker Cooperatives website. I'll say that again. It's the United States Federation of Worker Cooperatives and they have enormous resources and all of the networks that you would need to plug in. Here in New York City, we have the New York City Network of Worker cooperatives as well. And that would be a good first step, in my opinion.
- [52:10]
A
Do you see it emerging?
- [52:12]
C
Let's say what I see is every year we have a conference where all the worker cooperative people come together. And every year there's more and more people coming to this. And every year we're seeing these two tendencies in these other movements becoming more interested and finding places to work. We also see really interesting movements with business conversions. So in the United States, we're facing something called the Silver Tsunami, where we have the largest group of business owners who are about to retire as the baby boomers are aging. And there's been studies that show that this, if these businesses were able to maintain their current levels of employment, that beyond this person's retirement, that would be the single biggest source of preventable job loss in the United States. It's a tremendous number of people and we are seeing interest and experiences in business conversions where someone who is leaving the business wants to sell it to their workers so their workers can run it as a cooperative. These are happening more and more frequently.
- [53:28]
A
Right. And I've learned about this too. And what struck me as so powerful about what you just said is that the retiring business owner, if he or she sells it to another company, they don't know what's going to happen if they go public and sell shares, they don't know what's going to happen, that if you really want to keep it going and to keep the jobs and to keep the community that depends on it, that's your best option, is to sell it to the workers because they have then the vested interest that will be able to find a solution of that kind. So it's not just a justice commitment, it's really the practical, best solution for a small business owner who cares about the community in which he or she developed the business.
- [54:17]
C
Absolutely. And many times they think they can pass it on to their children. Many times their children really don't want it. And we've seen oftentimes when they do sell it to an outsider where they think it's going to keep running as it was, the outsider then in turn tears it apart, sells it off for parts, essentially, and the jobs are gone, the legacy is gone, the community is gone.
- [54:41]
A
Is it fair to say that worker co ops is a concept whose time has come?
- [54:47]
C
I think so. When I studied economics, I was very interested to learn about the shifts in economic paradigms. So we had certain economic paradigms that would be in place until they stopped working. For example, we had an economic paradigm of Keynesianism between the Great depression and the 70s. And then when that stopped working, it switched. And then we got neoliberalism. And we've had neoliberalism for quite some time. We see what are the results. Oxfam produced a study this year that said that eight men own as much wealth as as half the world. And what's incredible is I believe when they produced it last year, it was something like 30 men. So it's just becoming worse. Yeah, it's going to be one person or less than one person pretty soon. We see economic crises happening over and over again here in the United States, in other parts of the world, where everything goes down the tank, the people at the bottom suffer, and then we build it back up again and we see the climate crisis, which is really threatening our survival as a species. So I would say the economic system that we have is not working. And I think there's a lot of people thinking about what does this next system look like. And I think the work that we're doing now really is a seed and really is an example that can then be taken in many directions.
- [56:21]
A
Wonderful. We've come to the end of our time. Emma, thank you very much for coming and sharing your experience, your knowledge and your enthusiasm because they're all needed for this to move forward. Thank you very much and thank you all for listening and watching. I want to again encourage you to be good partners of economic update. Make use of Those websites, rdwolff, with two f's.com and democracyatwork.info they have materials ways for you to communicate with us, ways to follow us on Facebook, Twitter, Instagram and all the rest. And I want to thank truthout.org, that remarkable independent source of news and analysis that has been a good partner for us for a long time. And I look forward to speaking with you again next week. Sa.