Living Legend Sez

By: Maynard Cressman

Well, kids, this is the last installment of Sez for the academic year, a sad moment for my cult following of three readers. When last we met, I was bemoaning the enormous inequality gap in income and especially, wealth, between rich and poor folks in the U.S. I blamed our economic system, capitalism, as the reason. While it generates a vast array of goods, the prosperity capitalism also creates has been compromised by the financial insecurity being experienced by the majority of Americans. To try to stay afloat financially, Americans are now working, on average, 49 hours per week, the average U.S. household using credit cards is carrying $15,762 in credit card debt and 49% of Americans report that they have no savings whatsoever.

How does capitalism generate such inequality? The concept of surplus value, which is essentially that we who work are never paid the true amount of money our labor creates for the owners. That surplus we create ultimately results in the profit for the ownership, which is either reinvested in the enterprise or taken in wages by the owners. Today, the highest paid employee, the CEO, is paid on average in the U.S., 366 times more than the lowest paid worker.

This is not necessarily mean-spirited on the part of ownership. The function of a business is to generate profit and it is through the unpaid labor of the workers that capitalism creates profit.

So, here’s the solution which I endorse: employee-owned companies. This is not employees having stock in a company owned by others, but instead a company owned directly by the employees. If there are 100 employees, each employee is a one-one hundredth owner. Then surplus value would be distributed at the employee-owner level giving each one the actual value of what that person is producing for the company. Employee-owned companies would also facilitate democracy in the workplace because all major company decisions would be made democratically or by consensus by all of the employee-owners. This could take place within a larger, capitalist, free marketplace where employee-owned companies either compete with one another or find new levels of mutually beneficial cooperation. Employee-owned companies are not utopian; they already exist and new ones are starting up in areas such as the Silicon Valley, every year. Think about how employee-owned companies could provide everyone with a liveable wage, the major need for those living in or near the poverty level. We can do this, but are we so wed to the cultural norm that we will not? Some will have the courage and vision to do so and ideally that will become the new normal. And if it does, it will enrich us all. By the way, conspiracy theorists argue that for the last 200 years, the powerful banking family, the Rothschilds, have run the world through their enormous ability to manipulate the world economy, even creating wars because it made them money (sure, Google them!). But I perceive people becoming increasingly uneasy about capitalism as the ideal economic system. Apparently, I am not alone – recently, Lady Rothschild hosted a meeting of top central bankers and other key money movers and shakers (including Bill Clinton) to discuss their concern about the growing public rejection of a capitalism that has so enriched them, and to strategize about what they should do about this. They are worried…..