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Sam. Saint gonna change. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, those of our children and those looming down the road. I'm your host, Richard Wolff. I've been a professor of economics all my adult life. And now I try to bring some of what I learned over all those years into this program and into the analyses of what's been going on recently in the economy we all live in and depend on. Before jumping into the updates that mark the first half of this program, I wanted to mention, as I often do, that for those of you interested in what we're about to do and in this program generally, we maintain two websites where we urge you to go because we upload enormous amounts of material there that go into what we do here on the program in much more detail. The first one is democracy at work. That's all one word, democracyatwork.info info. And the other website is rdwolf with two Fs. That's me.com so democracyatwork.info and rdwolf.com by going to those websites, you can communicate to us email wise in any way you like, what you want and don't want in this program suggestions ways that we can partner with you and vice versa to extend the reach that this program has. We're proud of the 80 stations that carry this program, of course, but we're always looking for more such stations. We're looking for opportunities to present the kind of ideas we have on this program. And the websites are a way for you and us to be in constant touch. The websites also allow you to follow us on Facebook, Twitter and Instagram, and thereby keep in even closer touch with us. You can sign up for our newsletter, which lets you know what we're doing, and you can arrange for visits and so on in all the ways that a good partnership enables. Please make use of these websites. They're available at no charge whatsoever, 247 for your convenience. Okay, let's jump right in. I want to shout out to the new government in Australia. Why? Well, they're conservatives, which would not normally draw that much attention from me, but they're conservatives who seem to have understood that, yes, they won the election, but that the mass of the Australian people want to see some real changes because they're not happy with an economy that serves the 1 or 2% at the top at the expense of everybody else. So be surprised with me to discover that the new government intends to put heavy taxes on the major banks in Australia. That's right. Taxes totaling $6.2 billion would be raised over the next four years by a new levy on the big five banks of Australia, Anz Bank, Westpac, National Australia Bank, Commonwealth bank and Macquarie. It is interesting that there's a recognition on the part of the conservatives who rule in Australia that they've got to begin doing things not normally associated with conservatives, or else the growing anger of masses of people all over the world against old established political parties will blow them away, as it has so many others. The next update has to do with the Dakota Access Pipeline. We've talked about that before. That is the very controversial pipeline running across parts of the Dakotas and in particular across lands that have deep meaning and a long history with Native American populations in that part of the world. Obama had held back from allowing the pipeline to proceed. Trump has changed all that. The pipeline has proceeded and the opposition has grown along with this development. And I wanted to focus on an economic aspect of this struggle, which is far from over, by pointing out that the only way that Energy Transfer Partners, the parent company pushing all this through, can keep working at the Dakota Access Pipeline is if the banks who fund all of this continue to do that. If those banks withhold or withdraw from participating, then the money needed to push this project through to violate the lands of the Native Americans that live there, and you might think, given the history of the United States, that that violating the lands, the few lands left to the people who were originally here, is something an American company and an American society would shrink from doing. What's interesting is that the banks that have withdrawn under popular pressure have been so far mostly foreign banks. The ING Bank, a huge Dutch bank, in March withdrew, got rid of its loans. That was followed shortly by dnb, the major bank in Norway, and the Norwegian pension fund, a very important fund in that country, has also divested itself of anything having to do with energy Transfer partners because of the Dakota Pipeline. Even some American cities have taken interesting action. Seattle, Davis and Santa Monica, California in particular cut their relationships to the Wells Fargo bank with whom they had done business, because Wells Fargo is one of the major banks funding the Dakota Access Pipeline that has so far resisted and refused the efforts of public and also of its own shareholders to get it to stop doing this. So I wanted to call out both Wells Fargo for its responsibility. And there's something particularly nice about Wells Fargo being in this position since they have just been raked over the coals for the last year and a half for having literally created Hundreds of thousands and perhaps as many as 2 million phony accounts, phony savings bank accounts, phony checking bank accounts, phony credit card accounts, particularly targeting Hispanic American populations, got caught doing that. And now we find out that the same stunning leadership that led them to phony up all those accounts is also driving the decision to keep funding the particular path of the Dakota pipeline so that it violates the. The religions and the history and the traditions and the land ownership rights of Native Americans. The other bank that should be called out is the bank that leads the biggest group of funders, and that's New York's Citibank. So if you're wondering who's making that possible, it's Citibank and it's Wells Fargo, once again showing that the big banks in the United States not only are able to manipulate interest rates and to manipulate foreign exchange rates and to help cause the meltdown in 2008 with the mortgages and on and on and on, but they are also behind some of the most controversial and ugly investment projects we have. My third update has to do with the elections in France this last week. And really here, what I'm concerned with is, again, the economics of what's going on here. And. And that got lost in the media hoopla. Under French law, there are two rounds to the presidential election. You have many candidates. Actually, there were about 11 in the first round. And the two who get the largest number of votes then have a runoff. And that runoff was then decided this last week between Marine Le Pen, the candidate of the far right wing in the French politics, a party that wants to put France first, that wants to literally make France great again. They took the Trump slogan and is ferociously anti immigrant again, similar to what you get from Mr. Trump and others like that. And on the other hand was Emmanuel Macron. He's an interesting character. He won. He beat Marine Le pen pretty much 2 to 1 in this second round. And he will be the new president of France. But that's what the votes say. What does the analysis say? What's really interesting is that if you count up the votes Mr. Macron got as a percentage of all those who were eligible to vote, he got 43% of the vote. That's how he became the president. Or to say the same thing another way, 57% of the French electorate didn't want him. Either voted for someone else or abstained or destroyed their ballot, which millions of French people can do and did do in this election. Now, why would a majority of the French voters not want Mr. Macron. And what lesson for us is in there? Well, the good news, you might say, is that the French were not prepared to vote in their own local Donald Trump. Marine Le Pen was rejected. Clearly, the French are not yet, despite being angry about what's happening to the French working class, angry that European Union has meant big profits for those at the top the French society, and loss of jobs, loss of income for the mass of the French working class. Yes, they're angry, and that's why they voted in the numbers they did for Marine Le Pen. But they don't see a solution in beating up on immigrants, literally or figuratively. They don't see a solution in withdrawing from Europe. That doesn't give them any reason to believe they'll be in better shape. Just like getting rid of a few million immigrants isn't going to transform the French economy either. So the majority wouldn't go near Marine Le Pen, but a majority didn't want Mr. Macron either. What's that about? Mr. Macron has never held elective office before. His job, before becoming the Minister of Economics in the now ended Socialist government of Hollande, was as a executive in a Rothschild bank in Paris. Not exactly the kind of preparation to be the president of a country trying to figure out where to go in an economic global capitalism that is not doing real well for most people. So Mr. Macron has very little to recommend him. Moreover, when he was the economy Minister for Francois Hollande, the now disgraced former President of France, he was famous for trying to alter the labor rules in France, making it easier for employers to fire workers, making easier for employers to get out of all kinds of obligations they have to their workforces, obligations that the workers in France spent a century struggling to acquire and, and to achieve. In other words, he is a friend of big industry. Now, it may surprise you that he was a minister in a socialist government, but it shouldn't. Socialism in Europe, as in so many other parts of the world, is in an advanced state of decay. A minority of the socialists still believe that we can do better than capitalism, and they want socialism to mean something about doing better than capitalism, having a different system. But Most socialists, like Mr. Macron, really believe in capitalism, have no quarrel with big business and most of what it does. They just think that there should be a good safety net, you know, some public support for the mass of people in the way of subsidized or cheap or free education, a national health program for people, things like that. So that most socialists in European countries, this majority group, are really quite like the Democrats here in the United States, only a minority want to go beyond it. Mr. Macron is therefore what you might call the center of French politics. He proposes to continue the austerity program that made his predecessor so unpopular. He continues, he says, to want to change the condition of working people. This is only going to make the French working class even more angry, even more bitter than it already was. And the only real question in France, and it is the same question everywhere else, is where will the increasingly disgruntled working classes go? To the right, into a kind of Le Pen France, Trump, America, Conservative Party, England, a kind of anti immigration, anti Europe, focusing its anger on the European Union and immigrants, even though thoseneither one of them are the cause or the root of their problem? Or will they go to the left, becoming the old kind of socialist that is saying we can and should change the basic capitalist system and not make ourselves dependent on a system that has worked so unfairly, produced such inequality, had such collapses as the one in 2008. So that's the real issue. Will the increasingly angry working classes go to the left or go to the right? And one thing is clear from Mr. Macron and from Mr. Trump and from Theresa May in England and the others like them, they see nothing, they understand nothing. They push right ahead with the neoliberal austerity program that has disconnected them from the mass of their own people. But because it's made a lot of money for a minority, and because the minority are the ones who fund these parties, they plow right ahead. This is like being on a train heading right into a stone wall, and all the people pretending none of that is happening. The next update has to do with something being contemplated here in the United States, and I'm talking here about eliminating the estate tax. Let me remind everyone what the estate tax is. If you die in the United States, maybe I should change that. When you die in the United States, you are allowed to leave behind roughly five and a half million dollars that the federal government will not tax. You can leave it to your heirs, your children, anyone you designate. If you're a married couple, you can leave twice that, basically $11 million. What this means is that the overwhelming majority of the American people, we're talking about 99% of the American people, have no federal estate tax to worry about because they don't have $11 million to leave to their children or to anybody else. So when we talk about the estate tax here in the United States, we're talking about a tiny percentage of the people well under 1% of the people have such an estate. So if we put a tax on such an estate, it immediately becomes the most progressive tax in the United States. Which it is. It is a tax that only goes after the richest of the rich. Lest you lose some sleep over the thought that the richest of the rich have to pay a tax. The average percentage paid by these extremely wealthy folks for the estates they leave above 11 million, because they don't have to pay anything on the first 11 million, those are exempt. If you leave more than 11 million, the average percentage in a federal estate tax is 17%. So you keep the entirety of the first 11 million, and you keep 83% of every dollar above that you leave to other people. In other words, the estate tax hits very, very few people and only those most able to pay. However, it does raise for the federal government roughly $23 billion a year. That's a significant amount of money. And to obliterate that tax, which Mr. Trump has said he will do, which the leaders of the Republican Party, both in the House and Senate, have said they intend to do, and that party now controls both houses, that will not only deprive the government of $23 billion it uses to pay for everything else it does, but it will lower a tax on the richest people in the United States and only them, because nobody but them pays this tax currently. It therefore is a major step in making the rich richer because they don't have to pay this tax anymore and the poor poorer, because the government that the poor rely on will have $23 billion less in estate tax revenue than it had before. For a society led by people who claim they're committed to the middle class and to helping average people, the obliteration of the estate tax gives the lie to all of that. This is the act of people who want to serve those who are at the richest end, the millionaires, the multimillionaires. And of course, they will come hat in hand right after they eliminate the estate tax to go to those same people who don't have to pay an estate tax and say, give me, as a contribution to my party, to my re election effort, just a small part of the tax relief I just provided you. And that will be the millions they use. One last thing about the estate tax, the leaders of the Republican Party, like our president, can't directly say, hey, I'm raising money by giving the richest people a tax break. So instead, they talk about the family farm, the little business that has worked all its life to accumulate some money to leave to its children. So we're all supposed to say, oh, we shouldn't take that away from the hard working people. So I looked into it. In 2016, there were exactly 5,200 estates that were subject to the federal estate tax. That's right, 5,200 estates. Out of that 55,05 times 10, 54 farms and small businesses were included out of 5,200 estates. In other words, the small farm, the little business that makes it, is a fantasy. It's a way of building people's sympathy for something they would otherwise never support. In a month of Sundays, I want to finish by talking about monopolies that are in the press again, monopolies that are happening all around us and the impact on us. We should begin to pay some attention to. Over the last week alone, three big monopoly actions took place. Sinclair purchased Tribune. That may not mean much to you, but what it does is it makes Sinclair the largest single owner of local television stations in, in the United States. It's a huge concentration that will allow one board of directors, one group of 12 to 15 people who sit on the board of Sinclair, to control the content of what you see on your local television. For an enormous majority of the American people, it's the concentration of media control. Whatever they decide is fake news you won't see. And whatever they decide you ought to see is what you'll have. No real freedom of choice. The choice will be made for you by a shrinking number of monopolistic corporations. Number two, the high end Coach bag company purchased the equally high end Kate Spade bag company together. Now that will make women's auxiliaries or women's accessories rather is the word I'm looking for a more concentrated industry, allow them to raise prices, to eliminate all kinds of jobs as they combine stores. It's another step to make more money for a small number of people at everybody else's expense. And then the biggest one, which was talked about publicly by none less than Warren Buffett, one of the richest billionaires on the face of the earth, who got angry at his fellow billionaires. He was commenting on the Trump administration's plan to cut corporate profits taxes from 35% to 15%. And he said, you know, I don't believe in that. That's not a smart move. The government needs to do things for people. We have real problems in this society and lowering the corporate income tax is only going to make it harder for the government to solve them. I'm against it. And then he pointed something out that I understand to be a monopoly problem. Here's how it goes, he says. Thirty or 40 years ago, the corporate income tax raised 4% of our GDP. It meant 4% of the wealth of our country was being taxed by the government corporations, whereas today, Mr. Buffett says it's 2%. In other words, the last 30 years have seen the real burden of taxes on corporations fall by half, he said. Over the same time, the cost of medical care in the United States over the exact same period went from 5% of GDP, 5% of the total production of goods and services in our society to 17%. For Mr. Buffett, this is craziness. We are hamstringing our people and our businesses, he says, by making them pay wild amounts of money for medical care. And instead of dealing with that problem, we're saving them money by having them pay lower taxes, hobbling the government, because that's what will happen if they don't pay those corporate taxes, meanwhile doing nothing to enable the government to deal with this absurd overpayment of money for health care. And where does monopoly come in? Well, Mr. Buffett didn't have anything to say about that, but I do. The reason we pay 17% of the total output of goods and services in our society for medical care. And by medical care, I mean four industries. Hospitals, doctors, the producers of drugs and medical devices, and finally the medical insurance companies. Those are the four industries that make up what we ought to call the medical industrial complex. They operate like a coordinated monopoly. They get together, promise not to do each other damage one way or another, officially or unofficially, but by accident or coincidence, we'll never know. But we can suspect. And the end result is we Americans pay more for our medical care for those four industries than any other people in any other advanced industrial country. No other country comes close. Even though the medical outcomes of the United States are mediocre, we're not living as long as we used to. We don't have anywhere near the longevity of other countries or the conditions of well being and health. So we're not doing real well on the outcome. But we pay more than everybody else. That's because there's a monopoly in the hospitals and the doctors and the insurance companies and the drug and device makers. It's either one company what monopoly means, literally, or a small group that somehow managed to coordinate what in economics is called an oligopoly. But this tendency for many companies to become few and for the few to use their market advantage to make profits at our expense, that's going on everywhere, ladies and gentlemen. And it adds to the way in which the the capitalist system as it normally works is not working for the majority of the American people. And just as the folks in Australia have forced a conservative government to do things it never thought it would do before, namely tax big banks, the voters in France and the rest of the working classes in advanced capitalist countries are less and less willing to tolerate and accept a system that works so badly for them. We've come to the end of the first half of Economic Update. Thank you very much for being with us. Let me remind you that we will have in the second half a really important and exciting interview. I'm looking forward as soon as this break is over to introduce you to my guest who I will be talking to. So please stay with us. After a short interlude. We'll be right back.
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Bad girl I've been careless with a delicate man and it's a sad, sad world when a girl will break a board Just because you can don't you tell me to deny I don't wrong and I want to suffer for my sins I've come to you cuz I need.
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Welcome back, friends, to the second half of economic update for May 2017. I'm very, very pleased and gratified to welcome to us and to this program today, Jessica Gordon Nemhard. I've known her for quite some years and it's a pleasure to have you on the program.
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Thank you. It's a pleasure to be here.
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Let me introduce Professor Nemhard to all of you. First of all, she's the author of Collective A History of African American Cooperative Economic Thought and Practice. So once again, the new book Collective Courage. She is a professor of community justice and Social Economic Development in the Department of Africana Studies at John Jay College of the City University of New York. In 2016, she was inducted into the US Cooperative hall of Fame. She's also a member of the Grassroots Economic Organizing Collective, co founder of the Eastern Conference for Workplace Democracy, and a charter member of the United States Federation of Worker Cooperatives and the U.S. solidarity Economic Network. Quite a list of activities and just the right person to talk to us about worker co ops. So let's jump right in and let us pick your brain as we say. You obviously became interested in worker co ops as an important institution, both in terms of the role it has played and the role it could play years ago because you've been working at it, I know, for a long time. Give us an idea of why this whole idea, this alternative, captured your interest.
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So I've always been interested in racial economic inequality. I come from a family of social activists who actually taught me from early on that you can't really achieve political or social justice without economic democracy. And so my whole life I've kind of been involved in economic justice movements and thinking about the economy and how we could make it better and oh, I guess it's maybe 20, maybe a little longer than that. Years ago, after graduating from UMass with my PhD in Economics, I was thinking more about economic inequality and community development strategies. Luckily, one of my classmates had done a study about Du Bois and Lloyd Hogan and economic democracy. And so I was talking to him, I was talking to some other people in Washington D.C. about alternative economics. And I realized that this cooperative model had some promise.
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And so you go ahead.
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So I started setting it on my own and also realizing that it wasn't just the co op model, but it was really the worker ownership, the worker co op part that really got my attention because as I said, I'm really interested in economic inequality. I want, I want programs, policies, structures that will really put control into not just communities hands, but the hands of labor working people. Because we're the ones who make everything. We're the ones who make everything, do everything. We're the ones who actually create the profit, but we don't always control it. So figuring out how, to me figuring out how we could control our own economic activity in a way that helped ourselves, our families and our communities was what would really be transformative. And so I really began studying the field, trying to figure out what we knew, what we didn't know, trying to get African American communities involved. And that led me to become actually a mover and a shaker in the worker co op movement as well as doing this research that I've been doing.
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All right, tell me, here's in a way the $64 billion question. Is it reasonable for us to say, you and I sitting here today, that there's some kind of transition going on, that capitalism is being questioned, challenged in terms of a top down hierarchy, a tiny number of people owning and running the businesses by an alternative model, the worker co op as a solution, a way forward? Is that too much to say? Is it too little? How do you react to that?
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Yeah, I think we have a really exciting growing movement in worker ownership, especially worker co ops. And I feel like there's two things, at least sort of in my sphere, two things that happened during the Clinton administration. Everyone kept talking about we're in this new economy, we're never going to have Unemployment, again, I don't know if you remember that, but you probably do. And there were some of us who were kind of critical of that. Right? We're being unrealistic, skeptical, we're being unrealistic. Those of us who are interested in racial economic equality were saying, yes, you can say we're in this new economy, but it really hasn't penetrated for people of color, haven't really benefited, Right? So that was what, the 90s or whatever. Then things got worse again and people backed off of the new economy. And then we had the Great Recession. By the time we had the Great Recession, I think that's when people really started understanding that whatever was going on in the economy, it wasn't doing it was supposed to do, right. It wasn't reaching the people that needed to be reached. The Occupy movements, some of the other black movements were saying, there's really nothing here. Even if we try to get a piece of the pie that everybody says we should get a piece of, it's not enough. We can't. You know, assuming that we can, right? The pie is shrinking, it's not enough. And so I think people realized it wasn't just that it was hard to get a piece of the pie, but right, there wasn't a pie. Or like Malcolm X and Martin Luther King said, you know, we're trying to get into a burning building, right? Why should we try to get in the building? Right?
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Why don't we? It's not any better than being outside.
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We need something new. So I think we're finally in a period where people are saying, you know what the solution is not to get our foot into capitalism or our foot into the door. Our real challenge is to create new things, to figure out how to create that. And luckily we were able to strengthen the worker co op movement. The United States is the last, at least industrial developing country to have even had a worker co op movement. To have. The US Federation of Worker Co Ops is only 10 years old. We started in 2003. We were the last ones to even really embrace it nationally. But at least finally we did. And I think we did it just at the right time because we were there just when everybody kept saying, we need to look at something new, what's viable. And the two things we were able to do was one, show that there are existing worker co ops and how well they're doing, and then two, to say, we can build a culture of learning how to do this. We can learn from best practices. That's the Eastern conference that I am one of the co founders of that was our point, to share best practices. Let's get people together in the eastern region who do worker ownership. Let's share best practices, teach each other, keep the movement going, help more to develop. And so I think we've been able to. Every year we get more and more people coming to conferences. We get more and more groups doing this worker ownership. My personal crusade was getting this more out in the black community. When I first started, black people told me that blacks don't do co ops, which makes no sense except that they had this narrow vision of a hippie food co op. Right. They didn't think about even housing co ops. They didn't really think. Right. And so one of my crusades was to make sure that we learned that there was a legacy of African Americans doing co ops from the very beginning. Not only a legacy from early African communities, communalism. So putting together the fact that we could now talk to people of color about co ops, we had these best practices that we could share. And we had a growing movement that was trying to do education and technical assistance. I think we're positioned now to really see that this is a viable strategy.
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Wonderful, wonderful. That's my feeling too, in the work that I do and the traveling I do, that this is an idea that is taking off not only because people are critical of the existing status quo, the capitalism, but they see this as one of the few sensible ways forward that's very, very positive. Okay, I want to come back to those examples because I think that's important to talk about. But before we do, tell us a little bit, because it's your book about the special, let's call it, for lack of a better word, special relationship between the worker co op idea and the African American community in the United States across its history. What importance, what role did worker co ops have, and what role do you think they could have for that community in particular?
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Right. So first, I'll give you just one caveat. Throughout the history, we really first embraced consumer co ops. But there's two places where the worker co op movement was really essential. One was the 1880s, which was very early in our history. And another was this concept of the co op commonwealth, which started the notion there is. You start with consumer co ops, but they create the demand for worker co ops. Right. And so there was like the Young Negroes Cooperative League, even WEB Du Bois, they sort of started out with, well, if consumers come together, try to control what we buy and how we buy it, and learn how to cooperate, then our Demand for products could then create the demand for worker co ops, co op factories, other worker co ops, et cetera. But in the 1880s, one of my favorite periods, and actually we're in a similar period now to the 1880s. Very regressive period. Right. It's the end of the Reconstruction. We had economic and political democracy of some kind for a while. Right. But the 1880s were a time where the co op movement, the labor movement, the progressive movement are all integrated movements, meaning blacks and whites doing it together and they're all working together. So the labor unions were actually arguing for co op worker co ops and creating worker co ops. In that period, they were also integrated, even though in the south, to be an integrated union meant you had separate black and white chapters, but it was all part of the same national union. And you could even fight for the same organization, but you couldn't meet together, you couldn't sit in the same room together, but that was integrated. And so these. And they're the largest organizations of their type. The Colored Farmers United Colored Farmers national alliance and Cooperative Union is the largest black organization. And it's a credit union, co op developer, it's a populist party and it's a labor union. So really exciting stuff happening there. And they're owning their own cotton mills. They're also making it possible for blacks to own land and to move from being itinerant and sharecroppers to being landowners and then doing agricultural co ops, they're doing factories. And so it's a really nice period where you can see where all the different kinds of movements actually see the economic strategy as this co op ownership strategy and the way forward. So that's the 1880s, unfortunately, those three movements actually get crushed. Right. The labor movement becomes just white.
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That has a lot to do with the whole Jim Crow that comes after Jim Crow.
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Right. But even in the north, right. They separate because they get the black and white workers fighting each other. Right. The co op movement gets separated from the labor movement and then the populist movements get destroyed also for a more conservative whatever. And then the Ku Klux Klan and all that are at the rise. So unfortunately it's over. But it's a good way for us to see what's possible and how the minds, when you're trying to think about what's. How do you do political emancipation and economic justice, how you can combine them all.
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I also find it so amazing that the stories of black and white working very effectively together, also that the labor unions and the co ops understood Themselves to be natural allies. Natural allies. And the logic, when you go back and you look at the literature is incredible. The union said we fight for a better deal with the employer, but the best thing for us would be if we were our own employers and then we wouldn't be fighting all the. It was just a wonderful, clear notion of how these two institutions could be allies.
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C
Right. And making those decisions on the job decisions, but also owning the capital. Right, Owning the capital and the profits and being able to decide what to do with it. So yeah, unfortunately all that has to go underground and then it kind of gets destroyed. But then there's pockets of it that keep coming back. By the 30s we have more of a notion again because capitalism is failing again.
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Right. The Great Depression.
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So then we have another rise there and then the 60s, especially in the black community. That's where the black power movements are again saying we need to control over our own. We need self determination. That means economic control. We need to control our own cities, communities. So the Black Panthers are doing not just free breakfast programs and free clinics, but they actually have bakeries and shoe co ops. They're newsletters, a co op, they do co op housing. So again, seeing the liberation movement needing this, we need to control our own economics. And that means labor controlling our own economics kind of comes back again, gets crushed a little bit and then looks like we're on the rise again. The Black Lives Matter movement has now embraced economic cooperatives, especially worker co ops in their new platform, front and center in their economic justice platform.
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Yeah, I wish it were a bit more front and center in Bernie Sanders, but at least in Sanders program there is a plank that says something about worker co ops and co ops in general. So you see it slowly inserting itself. One of the things listeners and viewers of this program want more of is some examples, some descriptions of ways or places or times, preferably in the present, when worker co ops are viable, when they're succeeding, when they're having good results. Do a couple of these come to mind that you could share with us?
- [44:33]
C
Yeah, I mean, I tend to live in the past because that's mostly what the book is about. But when I knew you were going to ask me this question, I went back to look at what I know about the present. So there's a couple of really fascinating examples of worker co ops doing incredible things so well. I'll give you a couple of examples of different kinds. So we have the largest worker co op is here in the South Bronx, Cooperative Home Care Associates. It's A little bit. It's not a self managed worker co op which a lot of the newer and younger ones are but it is, as I said it's our largest. It's a really great example of taking people in a low skilled job, upping the quality of the job as well as the quality of the care and creating something where people actually now have a way to. You own part of the business so you get dividends from the profits. You also have a decent wage, you have health care because they're part of the SEIU union. You have movement from out of the low skilled work up into the higher skilled parts of the job, that kind of thing. So that's really great. Mostly women. So it's also a women's empowerment kind of college.
- [45:47]
A
How many women?
- [45:48]
C
Well they have almost 2000, that's what I remember employees, I think about 1700 of them are worker owners and most of them women.
- [45:57]
A
And they've been going for quite some years.
- [45:59]
C
They've been going for quite some years. They have three or four different pieces. They actually have a non profit training center so some people get employed in that. They also have a new thing on disability home care and then regular home care. And I said there was four, didn't I? Anyway, I forgot the fourth one. So that's interesting.
- [46:20]
A
Very interesting.
- [46:21]
C
In terms of the self management smaller but growing sectors we've got the Arizmendi Bakeries in the Bay Area. That one's a really interesting model because what they did was they took a successful worker co op that was doing pizza and sandwiches or whatever asked them to share their model and to provide some 25% of their profits to a development corporation that would then develop not exactly franchises but more co ops along that same model. Use their recipes, training, et cetera. They now have about six and they're also helping a group in Calgary and Canada to do this. And so that project is really great because in some ways it's self financing. Each successful co op puts money back into the development corp so they can.
- [47:08]
A
Sell that provides the capital for another next co op.
- [47:12]
C
And so they tell Mondragon Spain kind of right. So that's why it's called Arismendi because that was the original founder of the product. So that one's really exciting because you get 20 or 30 worker owners all of their stores, six stores are very successful right now. They're able to keep putting money back in to do more. They have a long and extensive education and training program. You actually the new, the new co op gets to Actually train at one of the other existing co ops and things like that. So it's a nice interlocking system. So that's another one I really like Opportunity threads in North Carolina.
- [47:49]
A
Tell us about that.
- [47:50]
C
That's what's it called? Cut and sew factory. So they, North Carolina used to be a big sewing place but they lost a lot. Most of those sewing factories were sent overseas and. And so that whole area lost but still had people who had these skills. Right. So this is one. I mean actually over the 90s they had a bunch of different worker co op sewing factories that came and went. This is the newest version of it. They use fair trade cotton. Again, it's a way to get sewers to run their own company. I think they have 20 or 25 owners right now or people were on their way to ownership, joint decision making, sharing of the profits, the whole thing again, so they're outside of Asheville and western North Carolina. And then my last example, which I just forgot. Oh, the other thing here in the South Bronx we also have Green Worker co ops which is actually a non profit but it's a co op developer. And that one is a great concept to look at green jobs and worker owned green jobs. So doing sustainability, ecological development, finding jobs in recycling, in organic foods, et cetera. That then the structure is worker ownership. These are usually very small. Green Worker starts with co op academies. You get a group of people who are interested in starting a co op and a business together. You get them through the whole how do you start a business? Do a feasibility study, what's a co op? And then you help launch them and then provide them with help. So Green Worker Co ops right now is our largest co op developer in New York City. So that's also. And that as I said, combining with the sustainability. And then the last one would be New era Windows in Chicago, which you probably have had talked about already. But that one's a great model because that's conversion model, but not just conversion, but factory takeover. Right. The factory was going to be closed. Some of the employees took it over so it wouldn't close, formed a worker co op and have now been able to. I don't actually know how many worker members they have now, but they've been able, they were able to take over the business to buy it from the other owners and keep the business going and employ local Chicago people. So all these models I think have some things in common. One is this having a good workplace and community ownership to keep a business where it is. But they all have slightly different models in terms of how non hierarchical the management is, how self managed, how large they are, what industry they are in. But they do show that we can kind of use multiple models in a variety of industries. Like I have not found any industry that we couldn't have a worker co op in, right?
- [50:39]
A
And you know, in the way that replicates the history of capitalism, when capitalism first began, it was in only particular industries. And there were the people who were critical who thought it could only work in those industries. And then eventually they demonstrated they could work in all industries. Then there were people who said to the early capitalists, well, you're all small, you're not a big feudal farm the way the big feudal plantation was. And and so capitalists in a sense had to prove that they could go from a small to a medium to a large. They solved that problem. Mondragon obviously has solved the problem of going from a small group with father Arizmendi in 56 with six workers to 100,000 today. I mean, it's. There are all these put downs that bedevil the transition from one system to another. But the joke in the end is that if you're committed to this new system and it means something to you, its ability to adapt and to adjust and to find multiple models is kind of built in to the thing, right?
- [51:44]
C
The thing is to stay true to the principles, right? And the principles are this, democratic ownership, democratic participation, right? No tyranny of capital, giving back to communities, sharing with other co ops. And so the best models in terms of getting to scale are the ones that do these interlocking co ops, driven that help each other, that supply each other, that kind of thing. And that's a way to really support the project so that it can stay democratic, but also to make sure you can get those economies of scale that we like to talk about in general.
- [52:18]
A
Also, I think you make a very quick point, but it's very important that if you want there to be corporate responsibility, if you want the business to have a sense of rootedness in a community, of being responsible as a taxpayer, as an employer, as the owner of property, to do something for the community, relying on a capitalist who typically can live a million miles away, who has ownership interests but no involvement at all, gets you the result we see in America of abandoned cities and abandoned communities. So that the worker co op is also a way to build much more rootedness because it's the people of the community who work in the factory and vice versa. And that will be a much More solid way to build over the long run a socially viable society. It's sort of, it's an interesting point.
- [53:16]
C
Yeah. We have a lot of evidence of co ops giving back to their communities, whether it's just letting people meet in their space, whether it's buying local, whether it's cleaning up their block, whether you know, anything like that. And so we know that especially if you live and work in the same place, right. You care more about your neighborhood, your business is less likely to be polluting or exploiting in other ways, not on.
- [53:41]
A
The verge of leaving or selling out to somebody else.
- [53:43]
C
Exactly right. And then the co ops that have figured out ways for a job ladder, right, so they can keep their members, they don't just keep everybody down at one level, but build job level and other.
- [53:52]
A
So that you can rise, right?
- [53:53]
C
So you can rise, you can help develop the company into more and more bigger and better things. That all works well for people. And then I think the other thing that I've been learning is all the externalities. We economists like to use that word, but spillover effects, especially leadership development. We find that worker co ops develop leadership in all kinds of ways that you really don't get in any other situation. Not only do you develop leadership in your own company, but that spills over into sometimes in your home, the pta, you start other organizations, local political life, involved in political life. And that understanding between the transparency. We didn't even talk about financial transparency, but most of these co ops are open book management, which means every member.
- [54:39]
A
Can see what's going on, can see.
- [54:40]
C
The books, can actually knows how to read a bank's income and expense statement, etc. Well, that transparency also leads to civic transparency you now expect, Right. We could even start doing participatory budgeting in our cities with people that learned how to do open book management in their co op.
- [54:58]
A
Well, the other way to say it is people will be willing to accept politicians telling them what's going on without ever showing them the books because that's what they're used to at the workplace. If the workplace became a place where you expect, as a matter of basic rights, that you can see everything and decide your demand for real political democracy will be unstoppable because you have that, you know what it's like and what it means. In the very little time we have left, do you think that the growing inequality in the United States that we see around us is going to stimulate more interest in worker co ops? Is this a process that you can.
- [55:40]
C
Sense or see Yeah, I definitely think that's what I was saying. With the Great Recession that we had, I definitely see that people are getting more and more both frustrated and less attached to a system that's not producing for them. I do want to end with my newest passion is doing worker co ops in prisons. And so I just wanted to mention a little bit about that.
- [56:01]
A
Please.
- [56:01]
C
I found a co op in Puerto Rico actually of artists that own their own company. And it's just incredible what they've been able to do while they're still in prison, even though they can't actually touch the money. So they have to still have a corrections officer handle their books. But you know, they have a treasure that watches the books. But they've been able to send money to their families, finally support their families. They have gotten the right to actually sell their works outside the prison because they can pay guards to go with them to go out and sell the prison and come back at night. They have learned, right? Because not only do they're artists, but they have to run a business, right? So they learned how to use language better. They now how to read the books. Their secretary was. One of their secretaries was a poet and was doing literature and things like that. So another way to transform society is to think about another marginalized group which is in prison. And then for returning citizens, right? Just like for immigrants who worry about documentation. The worker co op model is just. There's just so many applications we can see for any of these kinds of groups. And then the human transformation that they.
- [57:19]
A
Have such a bad record in this society of recidivism, of, of people going back into jail. This is a more promising way to prevent that than any I've heard countries.
- [57:29]
C
That are doing it. Very successful, very low recidivism rates.
- [57:34]
A
Jessica, thank you very much for joining us. I hope everyone has found this as interesting as I have. Thank you all for joining us. Please be partners with us in all the ways we've enumerated. I want to thank truthout.org, that special partner of ours for years, an independent source of news and analysis. And I look forward to speaking with you again next week. It.