GEO Co-founder Frank Lindenfeld on Creating Economic Democracy
[Editor's note: This vision statement from GEO co-founding editor Fank Lindenfeld was originally published in 2001. In it, Frank lays out a comprehensive vision for a cooperative commonwealth encompassing everything from barter networks to taxes on financial speculation. While Frank is no longer with us, his vision of an economy and society rooted in solidarity and cooperation continue to inform our work at GEO. For more on Frank's life and work, see GEO #13.]
Transnational corporate capitalism is bad for humanity, benefiting mainly a tiny number of rich stockholders and corporate executives. Corporate capitalism holds wages down by forcing workers in one area to compete against those in other areas. The transnationals exploit men, women and children in poor countries, while they cut jobs and promote insecurity among millions of workers in wealthier countries. Corporations dominate democratic political systems by their campaign contributions to politicians and by monopolizing the mass media. Corporate capitalism thrives on financial speculation and the endless creation of consumer “demand” through advertising. The transnational corporate system is destroying the ecology of the whole planet. There are certainly exceptions—corporations that engage in ethical commerce and are committed to sustainability asa well as high wages and job security for employees. For the most part, however, the corporate capitalist system is detrimental to our most cherished human values. It must be replaced by a better economic system that transcends the limits of existing capitalism. As David Korten (1996, p. 222) puts it:
“Most social reformers have accepted a corporate-dominated wage system and chosen to pursue social policies that provide job security, tolerable working conditions, equitable wages, and the right to organize labor unions within the context of that system. If we are serious about human freedom and democracy, we must reopen the question of whether such adjustments are adequate or even possible within the existing system of business. (From When Corporations Rule the World, 1996)
What would an ideal economy look like?
There is probably no one best model for an alternative economy, nor is there necessarily any single best way to get from here to there.
My own vision of an economic alternative for postindustrial societies like the U.S is a cooperative commonwealth or social economy. It would consist of numerous semi-autonomous local communities producing mainly for local and regional consumption, with some exports of surplus to other areas. It would be a sustainable, steady state economy based on an ecological outlook that takes into account the welfare of future generations. It would be a mixed market economy including a household production and neighborhood barter sector, a large cooperative sector, a private small business sector, and a public sector.
Though the economy would be market-based, it would need to include:
- Social planning of major investments;
- A social safety net providing basic necessities and services at low cost to all;
- A curb on business concentration;
- Taxes that discourage financial speculation;
- A progressive tax system.
The cooperative sector would consist of community-owned businesses and worker cooperatives controlled democratically by their members. The co-op sector would include networks of regional cooperative banks, lending organizations, and worker-owned pension and investment funds with diversified ownership of productive enterprises. Some co-ops might be owned by communities or municipalities. Others might lease productive facilities owned by public bodies.
The small business sector would include microenterprises as well as small and medium size companies without foreign subsidiaries and limited in size. Transnational corporations would be severely restricted in a cooperative commonwealth, while consumer and worker co-ops, credit unions and cooperative financial institutions might receive special incentives and tax breaks.
The public sector would include publicly funded health care, transportation, and education facilities such as public schools and universities.
Strategy: Building a Cooperative Commonwealth
How to move in the direction of a cooperative commonwealth? On the economic side, we need to build an infrastructure of financial, educational and technical assistance groups to promote the development of regional cooperative networks. The goals would include transforming existing capitalist companies into cooperatives owned and controlled by their workers and/or by the local communities in which their productive facilities are located, and establishing new cooperatively organized businesses. A complementary effort would encourage the formation, stabilization and growth of owner-operated microenterprises and small businesses.
On the political side, we need to build a nonsectarian political movement to reduce corporate and centralized state power and promote devolution to smaller locally controlled, semi-autonomous communities. The goals of such a movement might include creating a social safety net to guarantee basic necessities and services to all, enacting strong trade barriers to encourage local food production and keep out goods produced under substandard conditions, instituting a genuinely progressive tax system, and prohibiting corporate interference in politics.
There are many obstacles to building a cooperative commonwealth, stemming in part from the power of transnational corporations to control governments and their monopolization of the mass media. (See Herman and McChesney, The Global Media). Two major obstacles preventing substantial social and economic change are the ideological hegemony of the capitalist model and many aspects of the globalization process itself.
1) Capitalism is often seen as the only way. After the demise of Communist rule in Central and Eastern Europe many have been misled into believing corporate capitalism is the only viable economic system. It is assumed that top-down decision-making and hierarchical management are the most efficient and best ways to organize work. Social justice seems to be forgotten, and the idea of a cooperative commonwealth hardly enters public discussion.
2) Globalization promotes capital flight to low wage areas, pitting workers in high wage countries against those in low wage countries, and encourages production for export markets. The struggle for workplace democracy may be eclipsed by the preoccupation of many workers with retaining jobs, pay and benefits. Globalization often bankrupts small businesses and local producers of food and other basic necessities, replacing them with corporate subsidiaries and franchises that siphon resources back mainly to rich shareholders.
3) Finally, the global mass media impose and reinforce an ideology of wasteful and mindless comsumption.
So where does GEO fit in? The challenge of democratizing our economic institutions and changing a culture based on commodity consumption, greed and individualism is truly daunting. Nevertheless, we hope to encourage and further the movements for economic and workplace democracy by:
- helping combat the myth that globalization is necessarily benefitial.
- providing news about efforts to build cooperative alternatives and political movements that challenge corporate capitalism;
- keeping alive the ideal of a cooperative commonwealth;
- helping combat the myth that globalization is beneficial;
- promoting intercooperation among those working at the grassroots to build community based and democratically organized economic alternatives.
- providing a forum for supporters of democratic economic alternatives to discuss together both what works and what doesn't, as well as longer range issues concerning where we want to head and what kind of a road we want to build together.