3 Ways To Have Economic Success Without Greedy Corporations and Huge Wealth Disparities
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We know there's something seriously wrong with our economy. Our system of economic rules and incentives was developed, and continues to be molded, by large multinational companies and implemented by politicians eager do whatever it takes to raise money and ensure that they never have to leave office.
This unholy symphony, orchestrated by the US Chamber of Commerce, working hand-in-hand with other trade associations, has ensured that the rich keep getting richer to the astounding point that America now ranks as a less equal country than Egypt and Tunisia. (According to the CIA's World Fact Book, which ranks countries in terms of how "equally" wealth is distributed, the US is the 42nd most unequal country in the world.) This system moves us ever closer to such severe inequality that social disruption is an increasing risk. (Consider the London riots against the fact that, in Great Britain, one million people from the ages of 16 to 24 are officially unemployed, the most since the deep recession of the mid-1980s.)
Yet, it doesn't have to be this way.
Examples of business communities that have achieved significant impact and scale, broadly distributing wealth rather than concentrating it, exist all across the globe under a header one might best describe as economic democracy. One thinks of Mondragon in Spain, Legacoop in Italy and the Co-operative Group in the UK. The Evergreen Cooperative in Ohio is our own homegrown American version.
Having recently returned from Mondragon, I had the opportunity to experience firsthand the principles and values that underlie their practice of economic democracy. In our now post-industrial age that has turned people into disposable assets, mere tools at the service of capital, it is breathtakingly hopeful to experience business that chooses to honor the essence of humanity over the accumulation of wealth in service of capital.
The Promise of Worked-Ownership Models
Mondragon, Legacoop, the Co-operative Group, and the Evergreen Cooperatives have structured their businesses around a socio-economic arrangement in which the enterprise is democratically controlled.
This limits the primacy of the profit-maximization motive that currently drives the way most businesses engage with the market. Though the form and structure of control varies -- think worker cooperatives, consumer cooperatives, employee stock ownership programs (ESOPs) and credit unions -- these businesses are organized to benefit a group of stakeholders, primarily worker owners, rather than outside investors.
This shared ownership helps diversify rather than concentrate wealth, rooting the value it generates in communities and keeping assets and resources from being transferred away from local communities and low-wage employees to multinational corporations and their owners.
Cooperatively owned businesses can range from small-scale local companies to multi-million-dollar global businesses, such as Organic Valley, the $500 million leader in the organic dairy industry; Nationwide Mutual Insurance, an 80-year-old Fortune 500 company, with more than $135 billion in statutory assets; and Land O'Lakes, Inc., a farmer-owned food and agricultural cooperative with $12 billion in sales.
Throughout the world, cooperatives employ more than 100 million people and have over 800 million members. In the U.S., nearly 14 million employees participate in 9,650 employee stock ownership programs at public and private firms with combined assets of over $925 billion.
According to Worker Cooperatives for the 21st Century by Nicholas Luviene, Amy Stitely and Lorlene Hoyt, U.S. cooperative businesses serve over 120 million members, or four in 10 Americans. The top 100 co-ops generate more than $150 billion in revenues, and there are more than 72,000 cooperative establishments in the U.S. providing over 2 million jobs. Two-hundred-and-fifty-five telephone cooperatives provide service to 964,000 households; 6,400 housing cooperatives provide homes for 1.5 million households; and 30,000 U.S. credit unions have 91 million members and assets in excess of $760 billion.