cj#979, rn-> Readers comment on Ownership debate…

1999-09-02

Richard Moore

Dear cj & rn,

There have been a flurry of thoughtful contributions to the 'ownership
solution' debate.  Boudewijn Wegerif took part of the thread and forwarded
it to another list (Boudewign - please let us know of responses from that
quarter).

Jeff has sent some more insulting comments, which I won't bother you with,
but I haven't been able to get him to respond to any substantive point,
other than to say 'everything is answered in the book'.  If any of you read
it, perhaps you can let us know if it has arguments and analysis not found
in the essay we saw.

Yours,
rkm

============================================================================
From: "Boudewijn Wegerif" <•••@••.•••>
To: •••@••.•••
Cc: •••@••.•••, •••@••.•••
Subject: Broader ownership strategy for capitalism -- debate
Date: Tue, 31 Aug 1999 18:27:27 GMT

Dear fellow-members of SANE and other friends,

I thought you might be interested in the hereon following presentation of a
"broader ownership" strategy for capitalism, and a critique of the strategy.

I have drawn the exchange from the political discussion forum crafted in
Ireland by Richard K. Moore (rkm) and posted through •••@••.•••.

The strategy is outlined in an article titled "Ownership Patterns -- Steps
Toward a Conscious Capitalism" by Jeff Gates and published in the June/July
issue of Inner Edge. Jeff Gates is author of the widely acclaimed book, The
Ownership Solution (1998). The critique that follows on the article is by
Richard Moore. I don't subscribe to the Jeff Gates'strategy in full, but
his article is extremely well written, with important data, and the
critique by Moore is well formulated.
---<snip>---

For friends who don't already know it -- SANE = South African New Economics
Foundation. For information, e-mail the administrator Russell Bishop via
•••@••.•••.
---<snip>---

============================================================================
Date: Tue, 31 Aug 1999 12:44:18 -0700 (PDT)
To: •••@••.•••
From: "John H.St.John" <•••@••.•••>
Subject: Ownership

It is no wonder tht Jeff Gate's book gets glowing reviews from so many
CEO's. It recognizes the problem of ownership as being key, but does not
recognize that the very structure of the modern corporation has been
implemented specifically to eliminate ownership. So long as common-stock is
sold on the open market; corporations will continue to be unowned robots
that make their decisions through frightened accountants who are wedded to
the bottom line. The idea of small stockholders exercising any of the
attributes of owners is ridiculous on the surface.

Corporations and the sale of common stock were organized as a subterfuge to
avoid liability, and without liability - there is no ownership. The problem
of lack of ownership can only be solved by returning ownership to the
employees and converting the corporation into a cooperative. Stock holders
should have their stock replaced by interest bearing bonds. In a limited
partnership; the limited partner has no ownership but shares in the
profits. By law: If he takes any job with the partnership he loses his
status as limited partner and becomes a partner. As a partner he is liable
not only for his investment, but liable with any other assets he might
posess including his person.

Outlaw the sale of common-stock!

The only reason for creating a corporation is to sell stock, (ownership).
This results in a robot being invested with the liability that normally
would belong to the original owner. It is a subterfuge to avoid investor
liability and is illegal under common-law.

John H. St.John
http://members.xoom.com/abolitionist
http://users.abac.com/homer

============================================================================
From: "Marc Bombois" <•••@••.•••>
To: <•••@••.•••>
Subject: Re: cj#978, rn-> Dialog w/Jeff Gates re: Ownership Solution
Date: Tue, 31 Aug 1999 16:07:59 -0700

Dear Richard,
 
I read the dialogue with some interest, however, as you can probably guess
by now, discussions of this type I find utterly futile. I'm glad you took
Mr. Gates to task over the possibilty of his suggestions ever being
implemented in the face of today's corporate hegemony, because they never
will be under the present system. Mr. Gates' ideas are reasoned,
intelligent, and hopelessly off the mark, thereby contributing greatly to
the smokescreen. Indeed, there is no more stinging indictment of his book
than the list of politicians and corporatists who endorse it. The comments
by no less an elitist than JD Rockefeller IV and the others of his ilk
could only have been produced in a state of malevolent glee, for how well
he knows the _real answer to solving the problems of capitalism. How well
he knows that scholarly writing and philosophical probing are all for
naught, so long as they do not disturb the worm at the heart of our
problems: the creation and control of the money supply is in _private
hands! Mr. Gates may have the best of intentions, as do all of us who are
struggling for genuine justice, but our lack of attention to exposing the
corrupt money-creation process is doing us in. And you can garner all the
warm expressions of encouragement you want, but the WTO is still meeting in
November in Seattle and _everything is up for grabs! Absolutely everything!
Canada now has an "Ambassador to the WTO", Sergio Marchi, an ambassador to
what is essentially a business forum. We are being sold out, taken over,
enslaved, unless we stop them. I am an alarmist, no apologies. If we are
activists, the time is now, we must get to work.
 
On Aug. 20 and 21 I attended the Save Canada Conference in Ottawa. There
were brilliant presentations by many of Canada's top thinkers and
activists, excellent workshops, and a clear consensus that we have very
little time, perhaps two years if we're lucky, i.e. if the corporate agenda
is not enshrined at the WTO this November. In Canada we are literally on
the verge of being absorbed by the US. Talk of "merging" the Canadian and
US dollars (read: getting rid of the C$) has already been floated. The
Conference delegates (about 150 people) passed a number of resolutions
which I'm sure are applicable to most countries. I've included them at the
end of this letter. I implore all activists to fight now for monetary
reform, expose the banking system for what it is, expose the lies of our
senior politicians, expose the facts that we do not live in a democracy or
have the rule of law. Protest. Tell everyone. Email everyone you know.
Hurry up!
 
In solidarity, Marc Bombois

------------------------------------------------------------------------


RESOLUTIONS OF THE SAVE CANADA CONFERENCE

1. Whereas the "national treatment clause" and the private legal standing
clauses in the Free Trade Agreement and NAFTA have paved the way for the
takeover of Canada by the United States and the colonisation of many of the
less developed countries of the world, and their continued existence
threatens the very existence of Canada as a national state;

Be it resolved that any continuing body or coalition that may result from
this Save Canada Conference be instructed to support the immediate
abrogation of these two treaties and oppose the inclusion of the "national
Treatment and private legal standing clauses" in the next round of World
Trade Organization negotiations and the proposed Free Trade Agreement of
the Americas.

    Moved: Mansfield Matthias; Seconded: Paul Isaacs;
    Amended Jesse Hearne;
    Passed: unanimously

2. Whereas the present electoral system results in near dictatorial powers
in the hands of the prime minister and his close associates, and this kind
of unilateral executive power is undemocratic;

Be it resolved that any continuing body or coalition that may result from
this Save Canada Conference be instructed to support measures for electoral
reform including proportional representation, citizen's initiative and
referenda, and an elected Senate which is non partisan in nature and which
would act as a  genuine check on the powers of the government on behalf of
all citizens.

    Moved : Peter McCrindle; Seconded: Ron Gray;
    Amendments: Paul Isaacs, Jesse Hearne, Gail Thompson,
            Barbara Halsall(?)
    Passed : unanimously

3. Whereas poor  monetary and fiscal policy and loss of public control over
the Canadian financial system have resulted in an explosion of debt;

    Whereas the current attack on social programmes is solely in response
to the demands of the financial sector of the economy and bears no relation
to the needs and capacities of the real economy;

      Whereas the cornerstone of any economic policy must be full
employment and respect for the environment;

     And whereas any attempt to regain control of the social and economic
policy agenda is inextricably linked to reasserting control over the
financial system;

Be it resolved that any continuing body or coalition that may result from
this Save Canada Conference be urged to support measures for monetary
reform.

                 Moved: Jim Jordan; Seconded :Marc Bombois; Opposed: one

4.Whereas the Third World Debt is a major contributing factor to inequality
and poverty,

Be it resolved we support the forgiveness of the Third World Debt.

                 Moved: Barbara Halsall ; Seconded: John Venittelli (sp)
                 Passed : unanimously

5. All resolutions passed at this Save Canada Conference shall be
translated by a professional translator.

Proposed by Peter McCrindle and Bruce Katz. Passed unanimously by the
assembly of the Save Canada Conference.

ACTION PLAN

Whereas this assembly of Canadians present at the Save Canada Conference
came together for the purpose of saving Canada;

Be it resolved this assembly supports the initiative of supporting the
Canadian Action Party or any other organization or political party that
endorses all the  resolutions passed at this Save Canada Conference held
August 20th  and 21st, 1999 for use as a vehicle to carry out the
resolutions of this conference.

Moved: Chai Khaliwal (Spelling); Seconded: Dr. Philip MacCormach; Passed:
unanimously

============================================================================
Date: Tue, 31 Aug 1999 21:51:45 -0500
To: •••@••.•••
From: Mark Douglas Whitaker <•••@••.•••>
Subject: response for Mr. Gates

To Mr. Gates,

I would appreciate a definition from your essay:

        democratic free enterprise -

Additionally--

I have some responses below, on how basically sound ideas for moderating
capital centralization,  in the economic sense, miss the historical way
capital HAS CENTRALIZED--with unrepresentative state aid, in the political
sense.

Furthermore, as Richard has pointed out, how will expanded ownership and
'stakeholding' in a political economic regime of degradation tend to
reverse said degradation, instead of exacerbate what it was supposedly set
up for by letting more people 'buy into' it?  You actually mention it is
your "hope" that it does. So you actually think it would backfire then,
potentially?

Give us your thoughts on what you see occurring if your "hope" falls
through. Certainly, "hope" means you see the potential of it occurring,
instead of actually saying that you expect it to occur.

All following quotes are from Mr. Gates, or his appended public-figure
sound bites:


    >The encouragement of such "up-close capitalism" can enhance
    >both motivation and mindfulness while better aligning self
    >interest with the common interest.  Indeed, much of today's
    >violence - physical, psychic and ecological - stems from a
    >pervasive sense of feeling apart from rather than a part of
    >the free enterprise system and its impact on society and
    >nature.


Actually, your above descriptions of social disintegration has very little
to do with capitalism at all. What it does have much to do with are the
unrepresentative states and interstate relationships and the informal
interests within those states that hold back democratic participation from
checking degradative capitalism--through maintaining a rarified political
agenda.

I am all for your vision of moderating the massive economic hierarchies and
uncivic scale relationship of the present. I am simply unsure exactly what
expanding ownership will do in the long term. Actually, the expansion of
ownership exactly in the way you describe it HAS LED TO the conditions you
describe, instead of it being a panacea. How has it done this?

I will only cite one example, a repetitious one for United States history
however. Your work, if I may say so, is nothing novel. It has been the
typical response to systemic socioeconomic difficulties--expand the system
of ownership, expand the system of ownership.

The example. In this example, I am considering the easily witnessed effects
of any expansion of ownership attempts in the past--and how it has only
exacerbated the hierarchies instead of solved them.

The entire early United States policy drive of agricultural expansion on
small scale farms is a nice place to begin. It, as well, was decided upon
as a way to 'stay off' economic hierarchy by in a very muddled way of
thinking, ruralizing people. Unfortunately, by setting up this system, it
gets into the hands of speculators, whether originally, or when all these
isolated 'independent' people go bankrupt in difficult times or whatever,
they are there to purchase land, lend money, etc. See, setting up an 'even
playing field' only makes easy pickings for those looming down on it. In
economic sociology, it is called the 'asymmetry of information-' how those
with poor socioeconomic connections and information are the ones to suffer
the most in conditions of economic change, as they are the ones,
differentially over time, who are unable to maintain themselves. The well
connected, the economically secure can dabble and pick up more property
this way. Land tenure for African Americans, for indigenous peoples, has
played out the same way. This has been the historical result of the
expansion of "ownership": less ownership.

If you are seriously considering setting up these ' easy pickings playing
fields' you have to deal with the asymmetry of information. The easiest
solution to make is the rationality behind it, taking in a sociological and
interactive perspective, is flawed and untrustworthy. You are always going
to be playing with loaded dice, regardless of how flat you want to make the
playing field, because there will always be differentials of wealth in
society, whether by skill, luck, inheritance, etc. In solving the asymmetry
of information, the key has very little to do with expanding ownership, it
is in expanding political input along the lines and organizations in which
people already find themselves. Instead of expecting that more parcellation
of people and capital will lead to less hierarchy, it will and has in the
past, led to more hierarchy. This is a recipe for more hierarchy instead of
less. Stop attempting to expand ownership, and start attempting to find
ways to deal directly with the issue of hierarchy, politically.

Frankly, I consider you very well read and very concerned. I simply feel
that historically, (1) your argument is typical for any socioeconomic
crisis time as people are looking for ways to 're-believe' in principles of
hands-off economic expansion ( which only translates into states that
become puppets of highly hand's on private expansion and hierarchy), (2)
such thinking will certainly have a wide audience, because this is the
socioeconomic and political system most of the world is within, (3) it
'worked' in the past (as a steam valve) to the extent there was other
'wealth' to take into the system to put off political economic crisis, (4)
with the removal of a hinterland to send out people into, the political
willingness of elites to extend property 'rights' (to someone elses areas,
all the time) has decreased, since everything is already someone's 'turf.'
When it was someone else's turf, what did it bother socioeconomic elites in
a degradative political economy--they could keep politically sound at home,
by letting off the disgruntled elements EXPAND THE DEGRADATION FOR THEM,
while they pick of the choice morsels.

I feel your thinking is seriously in error, dangerously so. The key to
moderating socioeconomic hierarchy has a much simpler solution. It is far
from your roundabout way of expanding the basis of ownership as a solace to
economic hierarchy (which will only expand economic hierarchy through the
asymmetry of information).  The more direct route to moderating
socioeconomic hierarchy is to get them off of the state, which socializes
their privatization drive, while the vast populaces of the world actually
pay them to do it, through taxation. It is unrepresentative states that
have 'ruined' your vision of capitalism. I suggest that you work on means
of affecting a more representative state, instead of affecting a means of
abetting economic hierarchy.

I suggest that you face the possibility that capitalism has nothing to do
with a moral system. To the extent that it does is related simply to
politics, and where economically externalized elites found themselves in
the court based states of several hundred years ago.  Capitalism is simply
a realm of economic transactions that still have acreted to it the moral
protest discourses with which it attacked royalist states several hundred
years ago. With 'capitalism'  in the cockpit seat however, all that has
changed is that the feudalistic hierarchies have been expanded worldwide
along decommunitied corporations, instead of being replaced with something
novel. All that have changed as the discourses. The process of social
stratification based on states and the politics within states remains the
same.

The success, I should add of 'capitalism' and TNC expansion is highly
related to the 'peacetime warfare' of the United States for the past 50
years worldwide, in invading regimes that attempt to moderate capitalism
exactly like you would, and in propping up undemocratic elites supported by
military power and training and technology. Removed from the political
superstructure that maintains this degradative and de-communalizing
political economy, 'capitalism' would likely be much like you would wish it
to be--as long as there are ways of moderating capitalism within the
nation-state. Without this crux, however, the entire system of
unrepresentative state based degradative expansion would likely occur once
more. It is my suggestion then, that instead of simply concentrating on
moderating the economics--that to actually get in the position to do so,
one had to remove the political difficulties first and assure that the
state will be democratically available to check economic hierarchies from
short-circuiting any democratic process. Jefferson felt in the 1820s that
the United States experiments was already a failure, in terms of the
'mercantile' aspects that (they should have) seen coming, when they opened
the state to a democratic process without any sense of how to envigorate or
support uneconomic feedback in the democratic process.

---<snip>---

I visited the sharedcapitalism.org site. It has quite a high political
agenda of getting "noticed" in the media. I looked for the funding sources.
That information was left out of the pages, it seems. Would Mr. Gates, in
the interests of full disclosure and accountability, like to discuss where
this institutes funding comes from, politically speaking? I would
appreciate a link to it as well, on the webpages.

Regards,

Mark Whitaker
University of Wisconsin-Madison


============================================================================
Date: Tue, 31 Aug 1999 21:56:19 +0000
To: •••@••.•••
From: Elias Davidsson <•••@••.•••>
Subject: Re: cj#978, rn-> Dialog w/Jeff Gates re: Ownership Solution

Thank you rkm for the exchange about Jeff Gates' book "the Ownership
Solution".  I agree with your response to the book.   One more problem with
his proposition can be seen from the development of the communal
settlements in Israel (Kibboutzim).  Although the communal settlements were
by all means socialistic internally (means of production were collective,
decisions were made at the general assembly of all members, etc.) they
developed gradually into "corporative" entities which ensured members (but
only members) very comfortable lives and pensions while jaleously excluding
anybody else from membership. Thus most impovershed immigrants  to Israel
were not accepted as members of kibboutzim unless they brought capital with
them, not to speak of Israeli Arab citizens, who are by principle not
accepted (for racist reasons which are outside our discussion here). The
kibboutzim totally disregarded as time passed what we would call
working-class solidarity or international solidarity. They developed into
suburbian selfishness, the cult of possession. The values they developed in
their members, indeed because of their structure (which seemed at the time
as creating seeds for real socialism), were those of petit-bourgeois
ideology and conformism.  Today most Kibboutz members are not interested in
collectivism and prefer leave the management of the kibboutz to hired
specialists, content to live by the rent like small shareholders of fund
pensions.

Mind you, my description might be challenged by people who have studied
kibbotzim recently. This is at least the impression I have gained by
talking to various kibboutz members.

You are certainly right to remind about the role of the state in running
infrastructure. But I believe that the state has a larger role than than.
In the first place it is important that the State retain the tools to
decide on macro-economic policies.  The WTO and IMF rules attempt to
undermine the role of states in controlling their economies.  If a State
cannot control its own economy, it means it has no means to implement its
own social policies, and that means that democracy is dead.  The state is
moreover the main bearer of international law, and that includes the duties
to ensure human rights.  Individuals, even if they have some recourse to
complaint, have no tools of coercion to maintain the rule of law and ensure
human rights. Until there will be a World Government and World Police Force
(and I doubt it ever will), the only known mechanism to ensure human rights
and the rule of law, is the State.  The State is the mechanism which can
and should have the capabilities to ensure such rights, including economic
and social rights.  Capitalism (whether the TNC type or the "small
shareholder" type, is only an option for young, strong, intelligent people.

Finally another criticism is that the "Ownership solution" would create
different classes of owners.  The relatively few owners of large high-tech
industries will be rich while those who are not even working for
corporations will have no possessions and stay poor. There will also be
great differentials in power between "shareholders" of large corporations
and those who would jointly own a grocery store.

Perhaps the last criticism can be alleviated by judicious implementation.

That's all for today,

All the best,

Elias Davidsson

============================================================================
Date: Wed, 01 Sep 1999 20:09:03 -0500
From: Little Joe <•••@••.•••>
To: •••@••.•••
CC: •••@••.•••,
    jeff gates <•••@••.•••>,
    Thomas Kocherry <•••@••.•••>
Subject: Re: cj#978, rn-> Dialog w/Jeff Gates re: Ownership Solution

IMHO, in order to resolve, one must first define the problem, which is: the
unfettered circulation of 90% of the wealth in the upper echelons of
economic and political power. With this kind of constriction in the
circulation of money in the 90% working class population, there is no
possibility of "free enterprise capitalism".

Regardless of how one attempts to "sneak up" on the problem without
incurring the wrath of the encumbent system, there is no way to construct
the revolution without money.  Mr. Gates "The Ownership Resolution" gets
the cart before the horse, although there is a trend in the market toward
entrepreneurial ownership.  This trend can never be meaningful, in the
sense Mr. Gates suggest, because the volume of capital will never be there
without the resolve in the circulation of money first.

I would like to point out who has been responsible for this restricted
circulation of money over the past 50 years or so.  It is the U.S.Congress
who is passing out the favors and sucking in all the tax money from the
peasants.  Here is an excerpt from the House Ways & Means Committee
guideline on developing tax policy:

"The Federal Government provides {benefits} to individuals through elements
of the income tax set forth in the Internal Revenue Code.  Several
different types of income tax provisions are available to provide economic
{incentives} such as exclusions, deductions, preferential rates, deferrals
and credits."

This coercive, manipulative formula for controlling the circulation of
money was developed in earlier days by well meaning statesman but the
incentive of our congress of the past 50 years has been to  manipulate the
circulation of money to provide {benefits} and {incentives}. Even the
Congress thinks this is necessary to control the economic activities of
those poor ignorant masses out there.  Who needs this kind of "free market
capitalism"?

With Congress in bed with the "Closed Market Capitalists" and in charge of
tax policy, the question is how to break this clique?  We could have a
landslide of public opinion do the job, IF the public ever realizes the
nature of the beast.  In any case, the condition will get worse before it
gets better and that may, of itself, change public opinion enough to exact
change.

With the repeal of the 16th Amendment, elimination of the federal income
tax code and the payroll tax, and a new tax policy geared to taxing the
highest echelon of wealth development (GDP), only then will it be possible
to insure the complete circulation of money thoughout all economic classes.
Only then can we contemplate the massive citizen movement to engage in
democratic political participation and social economic activity.

rkm said:
    They embody the powerful 'aikido  principle', in which you
    harmonize with and then neutralize an opponent's energy,
    rather than countering with your own energy.

The Republican party is running strong for tax reform (for
all the wrong reasons).  Maybe this "aikido principle" could
be strategically applied to serve our collective interests
in the near future?  They (Repubs) shot themselves in the
foot before on the Federal Reserve Bank deal.



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