Democracy at Work: A Cure for Capitalism

This was an interesting and thought provoking book. The author, Richard Wolf, has written an intriguing and valuable history of the development of democratic capitalism. I found this part of the book very valuable. I also learned from his distinctions and history of the development of socialism and communism. He reverts back to the ideas of Karl Max and defines capitalism not in terms of markets and private property to ideas based on the means and goals of production:

“A capitalist system is, then, one in which a mass of people-productive workers-interact with nature to fashion both means of production (tools, equipment, and raw materials) and final products for human consumption. They produce a total output larger than the portion of that output (wages) given back to them.
The wage portion sustains the productive workers: it provides their consumption and secures their continued productive labor. The difference between their total output and their wage portion is called the "surplus," and it accrues to a different group of people, the employers of productive laborers: capitalists.

The capitalists receive the surplus from the productive laborers by virtue of a wage labor contract entered into between capitalist and worker. This wage labor contract specifies a particular commodity exchange. The capitalist agrees to buy-pay the worker regularly for-her or his labor time. The worker agrees to sell her or his labor time to the capitalist. The worker further typically agrees to use the tools, equipment, raw materials, and space provided by the capitalist. Finally, the worker agrees that the total output emerging from her or his labor is immediately and totally the private property of the capitalist
.
The productive laborers-those who produce the surplus-use the wages paid to them by the capitalists to buy the goods and services they consume and to pay personal taxes. The capitalists use the surplus they obtain from their productive employees to reproduce the conditions that allow them to keep obtaining surpluses from their productive employees. For example, they use part of their surplus to hire supervisors to make sure the productive laborers work effectively.

They use another part to pay taxes to a state apparatus that will, among other activities, enforce the contracts they have with their workers. They use another part of the surplus to sustain institutions (churches, schools, think tanks, advertising enterprises) that persuade workers and their families that this capitalist system is good, unalterable, and so on, so that it is accepted and perpetuated.

The workers who sign contracts with capitalist employers fall into two categories. Productive laborers are those directly engaged in the production of the goods and services that their employers sell; their labor yields the surplus that employers receive and distribute to reproduce their positions as capitalists. The term "unproductive laborers" refers to all those engaged in providing the needed context or "conditions of existence" for productive workers to generate surpluses. The unproductive laborers have their wages paid and their means of work provided by capitalists. The latter distribute parts of the surplus they get from productive laborers to pay and provide for the unproductive laborers.

In short, the capitalist economic system divides people into three basic economic groups: productive laborers, capitalists, and unproductive laborers. Just as the social context for the economic system-politics and culture-shapes and influences the economy, so the reverse also holds. To focus on a society's economic system, as this book does, does not mean that economics is any more important than politics, culture, or nature in the interaction among them that shapes every society. My focus on the capitalist economic system is driven chiefly by the widespread neglect of this dimension of today's social problems.”

He discusses the transition from private capitalism to regulated capitalism, and private capitalism to state capitalism (referred to by many as socialism). He makes little distinction between communism and socialism. And, he introduces the ideas of social capitalism.

The author develops his ideas for worker self directed enterprises. He introduces what I think is an unfortunate acronym “WSDE”. Weapons of mass destruction come to mind, “WMD”.  I found the latter part of the book discussing WSDEs to be a stretch and tedious. It’s certainly idealistic, and I am in no position, as a non expert, to judge this idea. I only know that it will be very difficult to gain acceptance and usage of this concept except in very special cases. There are just too many unknowns, and the barriers are enormous. The entire political-social-economic system is structured to fight this type of change. And, it’s not just the U.S. It’s the whole world.

Yet, here we are. All well known economic -political-social systems have either failed, are in crisis or are headed for a crisis. Let’s stay open and keep talking.

To read more, click here.

Capitalism's Destructive Power

Some ideas for radical change of capitalism: http://billmoyers.com/segment/richard-wolff-on-capitalisms-destructive-power/

Capitalism and Democracy

Very good (but short) interview on capitalism and democracy:


!!!!

The Daily Show with Jon Stewart	Mon - Thurs 11p / 10c
Al Gore Pt. 2
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

Values and the Spirit of America

Anand Giridharas[1] was interviewed by Jon Stewart on the Daily Show several weeks ago. Toward the end of the interview, he said this:

“When we talk about India; when we talk about China in this country; we talk about the economic threats. We’re all obsessed with economic threats. We’re all concerned about emerging markets. I think the real thing that Americans need to think about is that these countries pose a challenge of culture, a challenge of spirit. Just look at the segment you did on culture and discourse in America. We are all engaged in pulling each other down. We’re creating a culture of destruction and pulling each other down. And, India and China for all the work that lies ahead of them, are starting to create cultures of hope, cultures of creation where there’s a consensus on how do we create something extraordinary. And, we need to not be worried about the economic threat but that spirit in about two and a half billion people.”

I think he’s right. Furthermore, I think that the talk about civility will achieve nothing without visiting the underlying values.

A culture can be thought of in terms of its elements: behavior (norms), values, beliefs and philosophy. Values are often misunderstood, adjudged good or bad, or confused with behaviors or beliefs. But values are the key to creating or changing a culture.

The following are things that I have learned about values[2]:

• Values individually are neutral
• Values are priorities (I value this over that.)
• There are over 100 human values
• Values come in two flavors – means (I value this way of doing things.) and goals (This is what I want to accomplish.)
• Values are derived from beliefs and are the proximate causes of behaviors
• Values in humans develop through maturation of beliefs (1. The world is a mystery that I must fear; 2. The world is a project that I must control; 3. The world is a project that I must join; 4. The world is a mystery that I must care for.) Not everyone, or every nation, matures through all four stages before they die.
• Values sets can create positive or negative behaviors (Good or bad behavior judged by the belief system of the culture.)
• Values operate dialectically in pairs (means and goals) to produce a third value (goal)
• Chains of pairs of values operating dialectically results in the preferred thrust of the culture
• Values are created, reinforced or destroyed by a leader’s actions or non actions
• Any member can become a cultural leader
• It takes a long time for cultural change to occur
• You can temporarily affect change in values with resources and projects
• You can make long term shifts in values with education, incentives, communication, infrastructure and measurements

We know a lot about human values and culture. So, are we building the nation we want and need for the future?

Only 10 – 20 years ago I would have told you that I thought we were moving into a stage three society (the world is a project in which we must participate) with hints of a stage four society (the world is a mystery that we must care for). But now we are being motivated by fear and control (stage 1 and stage 2 societies). It’s tempting, and too easy, to blame this on terrorism. I think the regression is internal and much more dangerous. Terrorism is being used as a tool.

In reality, what we know about culture and values is being used to build a new nation. Except it’s not operating in the open. It’s hidden. And, it’s utilizing the fear of some people of personal and organizational growth towards maturity. And, the ultimate goal is transfer of power and wealth.

Giridharas also talked about culture and spirit. What is meant by spirit?

According to Wikipedia, “Spirit has many different meanings and connotation, but commonly refers to the non-corporal essence of a being or entity.”

There were two things that I learned from interviews with the coaches of the super bowl teams a few weeks ago that shed some light on the subject of culture and spirit:

• Football is a game played by emotional men. The coach’s roll is to channel that emotional energy.
• A team develops spirit when the players stop playing for themselves and start playing for each other.

I think you could substitute life for football and people for men, and you’d still have some true statements.

As it turns out in the evolution of individuals and their organizations, commonly held values shift from a focus on self (selfishness or narcissism common in our culture now) to a focus on the other (all that is outside of ourselves).

Michael Novak’s Spirit of Democratic Capitalism provides some insight as well: “What do I mean by ‘democratic capitalism’? I mean three systems in one: a predominately market economy; a polity respectful of the rights the individual to life, liberty and the pursuit of happiness; and a system of cultural institutions moved by the ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, and economy based on markets and incentives, and a moral-cultural system which is pluralistic and, in the largest sense, liberal.”

One profound truth that emerges from Novak’s work is how delicate the balance is between democratic polity, capitalistic economy and a pluralistic society. And, any attempt to change this balance ought to be viewed with alarm.

---

[1] Giridharas is the author of India Calling: An Intimate Portrait of a Nation’s Remaking. He writes the “Currents” column for The New York Times and its global edition, the International Herald Tribune: it explores fresh ideas, global culture and the social meaning of technology, among other subjects. In 2009, he completed a four-and-a-half-year tour reporting from India for The Times and the Herald Tribune, as their first Bombay presence in the modern era. He reported on India’s transformation, Bollywood, corporate takeovers, terrorism, outsourcing, poverty and democracy. He was appointed a columnist in 2008, writing the “Letter from India” series. In his article in the New York Times on 1/28/11, reflected on President Obama’s State of the Union address, “Obama Tries to Recapture a Lost Dream.

[2] Values are something we choose freely after considering the alternatives that we prize publicly, and that we act on immediately and repeatedly. The Genesis Effect, Brian Hall

Is Capitalism Working?

George M Tabor
Published: March 04, 2009 in Knowledge@Wharton

In the late 1970s and early 1980s, the American economy was in crisis after years of stagflation. Mortgage rates were 17%, business loans carried 20% interest rates and productivity had collapsed. On April 21, 1980, Time magazine ran a cover story that asked the question: "Is Capitalism Working?" Today, the crisis that the American economic system faces is greater than that during the darkest days of stagflation. In this opinion piece, George M. Taber, former business editor of Time magazine and author of the 1980 cover story, asks and answers the same question -- 29 years later.

The April 21, 1980, cover of Time magazine carried the stark headline: "Is Capitalism Working?" The American economy was in crisis after years of stagflation. The story recounted the ills: Mortgage rates were 17%, business loans carried 20% interest rates and productivity had collapsed. The article quoted Robert Lekachman, a left-leaning City University of New York economist, as saying, "The central economic fact of our day is the declining vitality and élan of capitalism and capitalists." On the opposite side of the political spectrum, Chrysler Chairman Lee Iacocca was quoted as saying, "Free enterprise has gone to hell."

I wrote that cover article, which set out the troubles facing capitalism in a crisis that shook the American economy to its roots. The 12-page story, twice the size of a normal cover piece at the time, outlined the history of capitalism and the case for it and against it. There was no doubt about my conclusion, and I still agree with the story's final sentence: "For all its obvious blemishes and needed reforms, capitalism alone holds out the most creative and dynamic force that any civilization has ever discovered: the power of the free, ambitious individual."

Today, the attacks on the American economic system are even greater than in the darkest days of stagflation, and even fewer people are now willing to stand up in defense of the economic philosophy that has its roots in Adam Smith's Wealth of Nations, published in 1776.

More

Meaningful Capitalism: Change We Can Believe In

Alex Pattakos, Huffington Post

"The Times They Are A-Changin," sang Bob Dylan, which is one of his most famous title tracks for it captured the spirit of social and political upheaval that characterized the 1960s. Personally, this was a coming of age period for me (i.e., my transition from adolescence to adulthood); and, importantly, I was able to experience first-hand the deeper meaning behind Dylan's lyrics. Like today, I'm haunted by feelings of deja vu as I write these words, the quest for "change we can believe in" was a, if not the most, commonly-shared mantra of the times.

Fast forward three decades, through many life blessings and meaning moments, to when I was serving as President of "Renaissance Business Associates" (RBA), a nonprofit, international network of people committed to advancing business integrity and elevating the human spirit in the workplace. During my tenure as president, RBA was active in Australia, Canada, Europe, Nigeria, South Africa, and the United States. The creation of RBA, in many ways, was a response to a call by the influential American author, Marilyn Ferguson, best known for her 1980 book, The Aquarian Conspiracy, who envisioned the business "community" as being on the vanguard for positive change in society and the world. My involvement in RBA during these years was influenced significantly by Ferguson's vision and call to action. (Sadly, Marilyn Ferguson died unexpectedly of an apparent heart attack on October 19, 2008, but her legacy lives on. To be sure, among her other qualities, Marilyn was a "true optimist" and firm believer in human potential.)

So I must now ask: are we closer to a "New Age" in business today than when The Aquarian Conspiracy was first released in 1980 or when I was affiliated with RBA in the 1990s? The current economic situation notwithstanding, or maybe in light of the current economic situation, is the business "community" finally on the cusp of becoming the vanguard for positive societal and global change after all? Can and does the "audacity of hope" apply to the business arena and corporate world? More fundamentally, is there such hope for "Capitalism" in the postmodern era?

More

This is an article worth reading and discussion worth engaging in. It's an important element to reinventing democracy.

Hyper-Capitalism: What Ever Happened to Free Markets?

by John Renesch

Market fundamentalists are fond of citing Adam Smith’s “invisible hand” theories as expressed in his book The Wealth on Nations, considered by many to be the sacred text of capitalism. Of course Smith could hardly have predicted the degree to which the market would be so manipulated as it has over the century and a half since he penned his 1776 book. Political lobbying and campaign contributions in the U.S. with the resultant government subsidies, tax advantages , changes to corporate law and other tilting of the free-market scale in favor of some to the detriment of others has created a market far from the unfettered model Smith had envisioned.

But that doesn’t stop the market fundamentalists from shouting “let the market resolve things”, “keep government out of the marketplace” and labeling any attempt to bring the scales back into balance as “socialism.” What market fundamentalists do not admit or wish to have known is the market is far from free. Special interests have sought advantages over generations so that those with the most to spend can effectively purchase preferred treatment by government decree and thus the rich get richer at the expense of the not-so-rich.

In effect what they are saying when they insist on keeping hands off the market is “don’t mess with the system that has been manipulated to our tastes” or, in essence, “we have the system customized to our advantage and we don’t want anyone messing with it.” Late comers might be saying “I have learned how to play with the present rules and I am doing quite well at working the system; please don’t mess it up because then I’ll have to learn a different way.” Either way, it is one-ups-man-ship, with a relatively small percentage of the population wanting to maintain its advantage over the rest of us. This tramples on the founding principles of equal opportunity, liberty and justice for all.

More

And click on Newsletter

Capitalism's Missing Link

Gurteen Knowledge Letter

I love the concept of the Social Business as defined by Muhammad Yunus. Here is an excerpt of what Karl Weber has to say about it in a recent article Why Social Business Is Capitalism's Missing Link on the Harvard Business Blogs website.

I think over the coming years we are going to see more and more social businesses as capitalism evolves and they will go a long way towards alleviating many of the sustainability issues we face in the world!

For most of us, business means one type of organization--the for-profit company that is the backbone of the free enterprise system. Ranging in size from a one-person corner store to a giant corporation like Wal-Mart, such companies recognize one fundamental purpose: to maximize profits. To be sure, they create other benefits along the way: they employ workers, provide useful goods, and pay taxes. But the bottom line is, precisely, the bottom line--the profits generated for owners and shareholders.

But we all know this is an incomplete picture of human nature. People are driven by the profit motive, of course. But they are driven by many other forces as well. Among these are the desire to do good for others, to help the needy, to make the world a better place--in fact, to solve all the unsolved problems that challenge humanity around the world. Yet today's capitalism is powerless to act on these motives, because it makes no place for them.

Unlike an NGO or a charity, a social business produces goods and services, sells them for a fair price, competes in the market for customers, and strives to cover its costs through revenues generated. But unlike a traditional profit-maximizing business, it exists to serve a social goal: to feed the hungry, house the homeless, provide health care for the sick, or clean the environment. What's more, it does not generate profits. Instead, any surplus generated goes right back into the business, enabling it to serve more customers and expand the benefits it provides. Hence this simple definition of a social business: a non-loss, non-dividend business with a social objective.

Credit: Karl Weber

You can see Muhammad Yunus talking about the Social Business Model below.

Capitalism after the ‘credit crunch’: what is it good for?

Society has found it increasingly difficult to interpret or give meaning to the current global recession. So far, the dominant response has been to seek refuge in mechanistic, formulaic phrases: ‘The world will never be the same again.’ That tired old line, echoing similar facile pronouncements made after 9/11, is of course so vague and meaningless that it can never be proved wrong.

There have been numerous variations of this portentous diagnosis. Joseph Stiglitz argues that recent events will be to ‘market fundamentalism what the fall of the Berlin Wall was to communism’. President Nicolas Sarkozy of France says American-style capitalism is finished, soon to be replaced by a more benign etatist alternative. Alan Greenspan, former chairman of the Federal Reserve and one of the public figures most associated with neo-liberalism, has acknowledged that he ‘made a mistake’ and that, quite possibly, the markets do not regulate themselves.

More