Posts Tagged ‘democracy’

Only in America

Posted: 2 December 2015 in Uncategorized
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Today, we were greeted with the announcement that Mark Zuckerberg, the cofounder and chief executive of Facebook, and his wife would give 99 percent of their Facebook shares “during our lives”—holdings currently worth more than $45 billion—to their nonprofit foundation, the Chan Zuckerberg Initiative.

Perhaps we should pause before we are swamped by all the gushing admiration for this grand philanthropic gesture.

As Jeff Guo explains,

The private foundation is an especially American style of charitable giving. Non-profits in the United States play a disproportionately large role in public life, in part because American tax laws make it attractive for the rich to donate. Much of their wealth could otherwise be captured by capital gains and estate taxes.

Private spending on social welfare in the United States is four times the average in advanced economies, according to the Organization for Economic Cooperation and Development. The wealthiest countries, like France and Germany, are far more likely to use government resources to promote social good, and far less likely to use private resources.

This gap in national philosophies helps explain why the Giving Pledge has been popular with American billionaires, yet not quite as popular abroad. German shipping magnate Peter Krämer is one of the most vocal detractors of the pledge, and the American tradition of government-sponsored charity. Here’s an excerpt from a 2010 interview with the German paper Der Spiegel, which asked him for his reaction to the plan.

Krämer: I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.

SPIEGEL: But doesn’t the money that is donated serve the common good?

Krämer: It is all just a bad transfer of power from the state to billionaires. So it’s not the state that determines what is good for the people, but rather the rich want to decide. That’s a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow?

SPIEGEL: It is their money at the end of the day.

Krämer: In this case, 40 superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. In the end the billionaires are indulging in hobbies that might be in the common good, but are very personal.

In the United States, Zuckerberg and other billionaires get to decide, privately and without any public deliberation, what to do with their wealth—how much or how little they will donate to charity, and what pet projects to sponsor with the amount they decide to give.

One alternative, as Krämer explains, is to let the state decide. Another, of course, is to let those who have produced Zuckerberg’s wealth decide—the people who work for his company (in which, even after his “gift,” he will retain a controlling interest) and the rest of us who are forced to have the freedom to use Facebook to stay in touch with our friends.

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WorkerCoOp

While we’re on the topic of democratic socialism, why not expand the definition—from improving the way the wealth of the nation is shared (e.g., by raising taxes on the one percent and strengthening the safety net) to exploring new ways of democratizing the enterprises where that wealth is actually produced (e.g., by promoting worker-cooperatives)?

The New Era Windows and Doors Cooperative in Chicago is one such example.

The New Era Windows and Doors Cooperative has been in operation since 2013. It hasn’t been easy, but the worker-owners have learned together how to operate their own business. And then there were the meetings: “It was difficult to make decisions together,” Robles said. “But it’s kind of fun, because at the end of the day it’s for the benefit of everyone.”

Sales are modest, but growing. Last year the company sold about a half million dollars worth of windows. This year, they anticipate the number will be significantly higher. There are 23 worker-owners, and two staff members who Robles hopes will opt to become worker-owners.

His vision is for New Era to help spawn other cooperatives. Instead of expanding by hiring drivers, for example, he’d like to see the company help start a cooperative of drivers.

How is this company staying alive when other owners have failed? The worker-owners made tough decisions about what equipment they could get rid of to save money. And they did a lot of sales via word of mouth.

“The good thing is we don’t have the CEO making millions of dollars,” Robles said, “so we have the ability to compete with the industry.” Also, they don’t have to generate big profits to keep investors happy; they just have to make enough to pay expenses and pay back their debt.

One of the keys for success at New Era is it operates according to a different logic:

This business model is based on “enough.” Enough pay and benefits to live with dignity. Enough of the machinery that is necessary, but not the sort that is too expensive. Opportunities for employee-owners to draw on their full capacities, not to be relegated to repetitive work while a few make all the decisions and much of the money. Their more equitable pay structure creates opportunities for more people to have enough to live and thrive; instead of keeping some at the edge of poverty while others prosper.

This is what local power looks like: companies like New Era Windows and Doors creating the stability that comes with locally rooted employment, insulated from the speculative finance that, in the case of publicly traded companies, requires many jobs be moved to low-wage regions. These worker-owners focus on values, including the possibility for others to also be worker-owners, and the importance of producing ecologically smart products. The company prides itself on selling energy-efficient windows and doors, and customizing them to the climate and location of the client.

Worker-cooperatives have many obvious advantages over capitalist enterprises, and thus should be part of any contemporary definition of democratic socialism.

They can also solve the problem of capitalist education—in which, according to Einstein, “An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.” Participating in a worker-cooperative means making decisions “for the benefit of everyone.”

And, if New Era is any indication, learning to do that can actually be fun!

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By now, everyone knows that the Greek people overwhelmingly voted “oxi” in yesterday’s referendum. They rejected by a very large margin the austerity measures that have been imposed on and in that country since the first bailout plan of 2010 (a bailout, as I explained the other day, of European private banks).*

Difficult days lie ahead—and, at this stage, no one knows what the outcome will be.

But the results of the referendum do merit at least a few remarks. First, the margin of victory of the no vote is extraordinary considering the relentless campaign of fear and intimidation, from public pronouncements of non-Greek politicians and finance ministers to the strangling of Greek banks, that took place during the week leading up to yesterday’s vote. The Greek people stood up that campaign and both rejected the continued imposition of austerity measures and registered a vote of confidence in their still-young leftwing government.

Second, the polls and pundits that filled the media last week, indicating a close vote and how much of a gamble Tsipras was taking, now appear to be less of an objective analysis of events on the ground and more a part of the larger campaign, inside and outside Greece, against a no vote. In the end, it represented a desperate attempt to topple a democratically elected government and to send a clear message to other anti-austerity movements across Europe—and it didn’t work.

Finally, the fact that Yanis Varoufakis was forced to step down as finance minister is the moment of farce that has become part of this Greek tragedy. Apparently, the delicate sensibilities of the negotiators for the European creditors were offended by Varoufakis’s unwillingness to act and speak as a desperate supplicant—and instead to speak to them as a democratically elected European equal.

The Greek people have spoken with a clear voice. Now, it’s up to the rest of Europe to respond by immediately injecting liquidity into the Greek banking system, by renegotiating the structure of the outstanding debt, and by creating a space for another economic model to be allowed to grow in Europe.

*I write “on and in” because, as our analysis often forgets, the austerity measures, while imposed on Greece by its official creditors, were also imposed in Greece by the country’s oligarchy and governments prior to Syriza’s election.

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