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A National Federation of Democratic Workplaces Can Lay The Foundation for Historic Change
By Gar Alperovitz

As an historian and a political-economist, I view the development of the modern workplace democracy movement from both perspectives. Broadly, the upcoming Founding Conference of Democratic Workplaces in the U.S. is both a marker of a major stage of achievement, and a platform upon which the 21st Century economic democracy movement is likely to build forward. In short, in my view the meeting could well be— is likely to be —historic.

People working every day to build and develop new cooperative and democratic work forms may not often think of themselves as “creating history.” Commonly they are more often involved in the important day-to-day details of making this work and their businesses succeed. From my perspective, however, what the movement is doing is working out the specific forms—through trial and error and hard work—upon which a major next stage of historic change is likely to be built. Without the groundwork now being established (and powerfully demonstrated by the coming together of the Conference), no next stage would be possible.

Participation v. Decision-making

Significant rather than marginal change may well be possible as we move inevitably over time beyond the Bush era for several reasons: First, and in the most general sense, I believe growing numbers of Americans are increasingly interested in democracy and freedom in the workplace. An obvious indirect indication of this, of course, is the interest of the most sophisticated managers in workplaces where employees take part in the decision-making and ownership. Shrewd executives know that employee participation produces better results, such as greater productivity and more profits. A major reason for this is the ever-increasing educational level of the U.S. population. More fundamentally, the last several decades have brought about cultural changes that point towards demands for greater worker participation in general.
On the other hand, “participation” in a business owned by others is a very modest idea—especially when understood historically. During the 1968 student\worker uprisings in Paris, someone put up a wonderful wall painting: “How do you conjugate the verb “to participate”?, the painting asked.

The answer:

I participate.
You participate.
We participate.

They decide.

That there is a difference between mere participation and real democratic decision-making is the essence of the recent workplace democracy movement in the U.S. That there is a difference between participation and ownership is also central to the rising tide of ideas. These two elements—real decision-making and real ownership—are critical, and they are also precisely the issues that, as practitioners know, require serious, sophisticated, and careful working out in practice.

Again, we are back to the meaning both of the Founding Conference—and the stage of developmental work now underway. Those taking the lead in learning and teaching us how to move forward, obviously, are people involved in the growing number of cooperative firms in which both democratic ownership and democratic control are central. Here the historic themes of one person, one vote and equal shares for all are central. (But they are not the only themes and issues—as anyone who has struggled with the details of cooperative ownership design knows.)

The Concentration of Wealth

A second reason I believe we may be on the cusp of longer term more fundamental change—and why the developmental learning characterized by the movement's achievements are so important at this stage—has to do with the way wealth is now owned. In any one year, the top 20 percent of the U.S. population garners for itself roughly 50 percent of all income. The top 1 percent regularly takes home more income than the bottom 100 million Americans taken together. A growing understanding of this is evident! The ownership of wealth has always been highly concentrated in the United States. In recent years, however, it has become almost Medieval in nature, and particularly for the kind of wealth which really matters: financial wealth, at the heart of the nation¹s productive economy. Many Americans own at least a share of their homes, i.e., that which is not mortgaged. But a mere 5% at the very top own more than two-thirds of the wealth represented by America¹s gigantic corporate economy, i.e., financial wealth (mainly stocks and bonds.)

People are beginning to raise more and more questions about these extraordinary concentrations. At one level are those calling for wealth taxes; this includes, for instance, Yale law professors Bruce Ackerman and Anne Alstott, who urge a 2% tax. Economist Thomas Michl has urged a net-worth tax, and Law Professor Leon Friedman has proposed a 1% tax on wealth owned by the top 1%. Robert Kuttner, Robert Reich, Kevin Phillips and Jeff Gates (among many others) have also urged that wealth taxation now be put on the American agenda. Even Donald Trump has proposed a one time 14.25% net-worth tax on Americans with more than $10 million in assets.
But taxing is only one element in a serious response to wealth concentration. The more fundamental answer is building new forms of wealth which benefit larger numbers of people directly. Many people working on democratic cooperatives do not like Employee Stock Ownership Plans (ESOPs) both because most are not democratically-controlled and because the distribution of ownership within most ESOPs is highly unequal. What is interesting to me, as an historian, is the developmental trajectory: Over the last several decades ESOPs have grown from a few hundred to more than 11,000. More people are involved in ESOPs than are involved in unions in the private sector.
There is also increasing debate among people concerned with ESOPs about “next stages” and about voting control, as well as about legislation to enhance both participation and greater equality of ownership. Quite radical plans have been offered by Clinton adviser Joseph Blasi, on the Left, and the very conservative Republican Congressman Dana Rohrabacher, on the Right.

The Leading Edge of Change

I am not here making an argument for ESOPs (though I do support greater democratization and reforms to make ownership more equitable). What interests me is the growth trend of another form which changes the ownership of wealth—and, above all, possibilities for future change. Similar, though less dramatic, trends in which wealth is owned by an institution broadly responsible to a “small public” can be found in connection with Community Development Corporations (CDCs), municipal firms, land trusts, and non-profit organizations which provide services to broad publics. In all cases, what is striking—and what tells us something about larger trajectories of possible development—is a change in wealth ownership structures accompanied by a great deal of experimentation.

This brings me back once more to the Founding Conference: Democratic Cooperatives are both the most equitable and most democratic form we know . People working with them and in them thus have a huge responsibility: they are literally the leading edge of historic change in this area. My hope, and, indeed my expectation, is that the work now underway will offer powerful lessons to others who are beginning to explore different forms of democratization of wealth. Ultimately, we together will decide on critical directions for the next stage of 21st Century development.

Gar Alperovitz, Lionel R.Bauman Professor of Economics at the University of Maryland, is the author of The Decision to Use the Atomic Bomb, of Rebuilding America (with Jeff Faux), and of Making a Place for Community (with Thad Williamson and David Imbroscio). His new book, America Beyond Capitalism will be published by John Wiley & Sons this fall.

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