cj#398> re2: CALL TO CITIZENS


Richard Moore

Date: Fri, 12 Jan 1996
Sender: Fred Baube <•••@••.•••>
Subject: Re. Employee Ownership

Eric Loeb wrote:
> So, let's fly United Airlines whenever we fly!  Are there other
> huge employee-owned companies?  Let's be sure to buy from them.

A practical measure !  It's a fact, Jack, that consumers
have amazing power, if and when that power is focused.

By all means, someone educate the list about what
global/national/regional companies are employee-owned.

What a great tactical-cum-strategic use for the Net ..


G'town U MSFS '88

Date: Fri, 12 Jan 1996
Sender: •••@••.••• (John Lowry)
Subject: Re: cj#394> re: Dugger: CALL TO CITIZENS

>...  Since employee-owned companies are guided
>in part by their employee/citizens, they are more likely to respond to
>the complex long-term dynamics of employee health and loyalty,
>customer satisfaction, and reputation for honest dealing.  These
>"intangible" factors are hard to quantify on a quarter-by-quarter
>basis, but they are sometimes painfully obvious to the employees

I heartily endorse this idea and point out that there is an active NGO, The
National Center for Employee-Ownership [I think], which moved its operation
from DC to Oakland, California not long ago [3-5 yrs maybe, time flies
when....] and can provide lots of help making the transition.  (The validity
of the underlying economics is spelled-out in the introduction to Investing
With Your Conscience, by John Harrington, John Wiley, 1992)

Another good reference is The Second American Revolution, by John D.
Rockefeller, III.  Not a great book, but a good one and the author is ...
"all-American."  Indeed, the notion of democratic rule of commercial
organization is the latest thing in business schools, though they don't
quite know how to say it plainly ....

As a plank for a progressive political platform, I would suggest
federalizing the charter of large, interstate corporations, and stipulating
that their boards of directors reflect the full spectrum of stakeholder
interest, i.e., investors, workers, customers, suppliers and neighbors.

John Lowry

Date: Fri, 12 Jan 1996
Sender: Francisco Lopez <•••@••.•••>
Subject: Re: cj#394> re: Dugger: CALL TO CITIZENS

There are a couple of things that have to be considered when dealing with
these issues.

I applaud the diagnosis made in this article, I have mixed thoughts for
the solutions proposed.

The first thing to be considered is the tendency of individuals to get into
their own businesses (from looking for a job to be service provider or a
merchant et) and, as they grow, the tendency to apply "free market" a la Adam
Smith, to an imperfect market.

The Adam Smith  free market in which supply and demand will fix prices
ariund an ever changing equilibrium point and thus, determine resource
allocation only function as it has been intended when the market have infinite
buyers and infinite sellers, everyone have the same access to
information, everyone have the same mobility, everyone have the same
power, et, an obviously utopian situation.

When enterprises try to maximize profits and/or market share (or minimize
losses and/or risk) they usually try to produce to a level in which the
rate of change in revenues is equal to the rate of change in costs.

When the utopian conditions set in the free market theory holds (that
never happens, although some markets like the currency, securities and
commodities markets approach a little bit that condition because of their
liquidity, spread of information, mobility and velocity), the prices will
approach the the value of the rate of change in revenue and the change of
rate in costs. At that level, the prices allows for no economic profits,
only for "normal" profits, which include the necessary profits to allow
a return on investment high enough to induce someone to produce these
goods or services a comparable level of risk without opportunity loss.

In the day to day real world we face, whenever enterprises try to
optimize, they face the reality of the size and other conditions of an
imperfect market. If they produce to the level in which their economies
of scale lower their costs, they may tend to control a bigger chunk of
their market, thus creating a monopolistic effect.

Society will tend to have lees of the good or service it wants, at a
higher price, and wealth (and power) will concentrate.

In the other hand, there is the phenomenon of the globalization of the
western-like economy.

When the western "developed" nations were big enough to produce relative
efficiently the goods and services their markets wanted or have colonies
or neo colonies to increase their supply of commodities and the size of
their markets, these nations tended to prosper more than the "third
world" nations, many of whom were colonies or neo colonies of the
developed ones.

The movement of commerce tended to be commodities and other raw materials from
the "non developed" nations to the developed ones and finished goods
and services from the developed ones to the non developed ones (also
including dumping of surpluses at lower than market prices). Political
dominance and war guaranteed the permanence of this scheme of things.

Then, after the WW2, the things started to change. Having colonies became
too costly and politically unacceptable. New countries wanting a bigger
piece of the action rose the price of the commodities and raw materials
they controlled. As the price levels around the world started to rise, the
law of comparative advantage of David Ricardo, became close to an axiom.

Countries may gain leverage by concentrating in producing those goods and
services they were more efficient to produce. Although the risk of
strategic loss of control of their economies was bigger, the lure of
being more competitive was a thing that could not be passed on.

International trade increased, capital and technology transfers put in the
economic map nations who were well behind in material development.
Consumption around the world increased. Pressure on scarce resources
mounted. Resources (including human: read-jobs) were allocated. In
developed countries, labor prices (wages) decreased in real terms while
grew in undeveloped countries.

It seems that, at least in the short and the intermediate terms (as
measured by the duration of an economic cycle), the world is an a stage
of account settlement. There will be a tendency to the leveling of the
standard of living around the world.

That means that the system that used to work relatively well for the
developed countries, the so called "free enterprise capitalism," which
lay persons confuse with "democracy" will no longer meet the needs of
those living in developed countries as it used to be.

In the long run, the things are [not] going to be better, at least, until we
reach critical mass again and have to expand human civilization beyond
the boundaries of the earth.

For the average non economist, the explanation of the reconfiguration of
the human society along economic and political lines, seems as a lot of
"isms," "itsms" et. These semantic boxes oversimplify complex phenomena and
cloud behind ideological smoke much of the underlying reality.

Apart from the "isms," itsms," and other likewise things, we have to
stand, the "left," the "right," the "center," may be the "front,' the
"behind,"the "liberals," the "conservatives," the "moral" majorities, the
"family values," and who knows, someday someone will come with irrational
and imaginary numbers to add more to the ideological spectrum.

Well, hope the little two cents contribute something to the debate.

Francisco Lopez
Marketing, Financial and Economic Research | 305 538-2666 Voice
International Trade and Investments        | 305 538-5681 Fax
2160 Park Avenue #1                        | 305 538-9888 Backmail/Data
Miami Beach, Fl, USA  33139-1725    | •••@••.•••



Mr. Lopez seems to have technical credentials in this area, and perhaps his
perceptions are correct, but I would like to take issue with some of the
implicit assumptions.

Foremost, is the seeming acquiescence to the current power regime.  If we
want to preserve (create?) democracy, we have the responsibility to ask
whether the "market path", with its promised payoffs and demonstrated human
costs, is the path we (humanity) choose to follow forever.  We need to do
more than observe the system from outside and speculate on how it will
affect us.

Second, I believe it is incorrect to view the global market system as a
competition between countries.  This is an officially encouraged view, with
all the talk about becoming "more competitive" etc.  And Perot bought into
it when he focused his anti-NAFTA campaign on the threat of job transfers
from the U.S. to Mexico.  And when you consider a Japan, a Germany, or a
Korea, you see cases where a country has distinguished itself from others
in terms of growth and exports.

        But nonetheless, I submit that the current dominant mega-trend is
toward global management by WTO/GATT/IMF-like commissions, with a
significant loss of sovereignty by _all_ nations.  It's not one country vs.
another, but rather the corporate elite vs. humanity and the national
states which are its long-evolving representative entities (imperfect as
they are).  And it's not wealth-shifting from one country to another as
much as it is asset-shifting from individual and public ownership to
"privatization" (i.e., to corporate ledger sheets.)  Yes there may be a
trend toward "leveling of the standard of living around the world" but it
doesn't come out even -- the trend is toward leveling at a very low scale,
with an elite managerial class.  The corporations who pocket everyone's
"leveling quotient" no longer have "home bases" (countries which benefit
heavily from their growth.)  The transnationals are global citizens who
move factories around chasing coerced tax break advantages, exploit
repressive labor enivironments whenever they can, and keep the
(mis-accounted and under-taxed) profits for their own re-investments or
dividend disbursements.

Third, I must observe that capital development does not depend on being
unrestrained to function effectively.  Scandanavian countries, for example,
have relatively strong controls over industrial operation, capital flight,
etc., and they've been able to develop very strong economies nonetheless.
Corporations will press every advantage they can, but they can survive and
prosper if given what they need, instead of what they want.

Finally, humanity _must_ finally accept the finiteness of its nest, and
begin to think in terms of sustainability.  We're near the final
no-more-free-ride breaking point on many of our resources (such as
life-supporting air and water) and we must smash the guilded idol of
"economic growth" before it smashes us.  Unlimited growth is simply
impossible by the laws of physics, and we must develop a new economic
paradigm that's not based on chasing the EVER-BIGGER pot-of-gold rainbow.
We need a way of computing profits (transaction incentives) that indexes to
human betterment, rather than to the rate at which goods are produced and
sold.  This point is addressed in Lowry's contribution, immediately below.


Date: Fri, 12 Jan 1996
Sender: •••@••.••• (John Lowry)
Subject: Re: words

Both capitalism and communism are very good ideas.  It's the people who
fail.  If you look-up the word "profit," and to understand what "Capitalism,
the pursuit of profit," is, you should start there, you will find that
today, it means something quite different than the classical defenders of
the idea had in mind.  Today "profit" means "gain or advantage."  The
"profit" that Adam Smith had in mind was "mutual benefit." Indeed, Smith was
a professor of moral philosophy and a Presbyterian minister.  Today,
economists like Michael Porter of Harvard write tombs and tombs about

In a world where the contest for power threatens to annhiliate us all, words
substitute for weapons.  We no longer use them to reason together for mutual
benefit, but as tools to seek and gain advantage.  In this light, judgments
about our prospects must be pessimistic, except for the constancy of
"redemption" as a theme of human affiars.

John Lowry

Date: Fri, 12 Jan 1996
Sender: "•••@••.•••" <•••@••.•••>
Subject: Re: cj#396> Got Democrats if you want them...

> Beware the bog of co-option!

Ugh!  Right you are, Richard.  Remember "Day of the Triffids"?
I'd rather spend my time gutting rotten fish, personally.

And you were right as well about the basic drift of Ronnie Dugger's
Call to Citizens:  Let's steer clear of that political party template
and organize to outflank the system rather than (Ho-ho) change it.


From: "Liggett, John" <•••@••.•••>
To: rmoore <•••@••.•••>
Subject: bravo on your response
Date: Fri, 12 Jan 96 14:12:00 PST

I really enjoyed reading your piece in response to ronnie dugger's call to
action.  I like your concepts and would like to volunteer my participation
in this.


 Posted by Richard K. Moore (•••@••.•••) Wexford, Ireland
 •••@••.•••  | Cyberlib=http://www.internet-eireann.ie/cyberlib
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