The New Abolition Movement

In the new landmark study cited two weeks ago by blog commentator Ray Miklethun of Atlanta, Thomas Piketty's Capital in the Twenty-first Century, the author summarizes the worsening situation.

    

… future inequality in the United States will be driven by two forces. A growing share of national income will go to the owners of capital. Of the remaining labor income, a growing share will also go to the top executives and highly compensated stars at the pinnacle of the earnings scale.

The new study out just this week is based on monumental research never before done of annual economic data on taxes, wealth and inheritance covering 200 years of financial history in Great Britain, Germany, Sweden and the U.S. The finding is that economic growth seldom leads to more equality. It powerfully refutes the prevailing wisdom that even when capitalism sometimes produces inequality, it will naturally correct itself. Instead during most of the last two hundred years it usually increased inequality, as is happening today; creating a new kind of permanent second class citizenship of the 99 percent, a wage slavery never envisioned by Marx, who was talking about miners and factory workers. 

The NY Times expose March 9^th of hedge fund manager William A. Ackman’s star power illustrates this politics of inequality. Through incredibly vast manipulation of Congressional, Wall Street and White House officialdom and endless connections, Ackman is working furiously to make a one billion dollar bet pay-off while claiming he is serving a public good.  It’s all about the financial position he's taken, called a short, that will only pay-off if he can force the shares of a vitamin and food supplement company called Herbalife to plummet. If they do he makes billions. But not the rest of us, we whom Ackman claims he seeks to protect from Herbalife. (The Herbalife business is for others to explore.)

In Silicon Valley, where Porsches and Lamborghinis roam the streets, between 2010 and 2012 average per capita income actually decreased 5% among Blacks to $30,758 while rising among Whites by 5.6% to $62,374; among Hispanics or Latinos it went down 2% to the deplorable average of $19,049. [source: 2014 Silicon Valley Index, p. 18]. Current BLS data, January 2014, confirms this trend. That’s in Lamborghini land!

Where the rest of us live declining standards of living have become the new middle class experience over the past twenty years. A new and ghastly racism has become a 21^st century form of inequality in a class by itself. In the U. S. prison system the Public Policy Institute reports that in 2010 among adult men, African Americans were incarcerated at a rate of 5,525 per 100,000, compared to 1,146 for Latinos and 671 for non-Latino whites.

Piketty’s study demonstrates that we are encased by an inequality by race and by class.

Faith communities and human rights groups should see this as cause for a modern “Abolitionist Movement” targeting the loss of income by nearly everyone but the top one percent. The illegality practiced on Wall Street that we have seen in the massive mortgage loan frauds, the buying and selling of legislatures and Congress means Democracy is now on life support.

A first “Abolitionist” step is faith leaders and human rights advocates becoming public citizens. directly engaging legislators and government leaders. (No intermediary community organizations, please). Direct congregational and citizen action of the kind that was practiced during the King era and by the courageous first Abolitionists of the 1830s is in order. But there is generational change of a different kind underway. 

A second abolitionist step is to move immediately to localize capital investments through worker and community wealth-ownership like the Evergreen Cooperatives in Cleveland [see blog for 3/7). Faith groups could begin to do this tomorrow. The GenX generation is at hand to lead or help with concrete practical tasks. Many larger congregations have scores of thousands of dollars in extra cash and the GenXers know where they can get more by working with community foundations and their large local corporate foundations.  Faith communities can begin to seed thriving new businesses that train local workers who reinvest their successful business profits into their own neighborhoods. This kind of locally controlled capitalism can spread coast to coast. A perfect scenario for GenXers.

While President Obama’s announcement this week that he will mandate the Department of Labor to require overtime pay for a wide range of white collar and food services workers is good, it will be resisted by the same conservative forces that are winning key votes from Florida to Tennessee. Countering steps must be taken by public citizens of the new Abolitionism.

Legislating salary caps like those at Mondragon could weaken the inequality pyramid. At the  Mondragon cooperatives in Spain 92% of the top manager pay is at 4½ times the minimum salary; larger industrial co-ops cap top managerial pay at 6 and 7 times the minimum salary. Compare this with The American Fortune 500 CEO compensation that is 410 times the average wage according to Kent State University’s Ohio Employee Ownership Center.

Third, more and more citizens can be helped through education to see that the systemic shortcomings of Capitalism must be addressed through increasingly stringent and enforced regulation. The new abolitionism will mean electing legislators loyal to their community’s citizens suffering from inequality.  Professor Piketty cautions that while it is possible to imagine public institutions and policies that would counter the traditional wisdom that the more perfect the market, the greater the equality, he is skeptical that it will be done.

Future leaders committed to social and economic justice could prove him wrong. That’s why ancient texts continue to have value, such as Jesus’ admonition that he did not come to bring peace, but the sword of righteousness. 

From Mondragon to Silicon Valley: the Move to Shared Local Wealth Production

Are worker cooperatives a plausible alternative after the victory by Republican autocrats over a proposed union and worker council at Volkswagen?  While this victory of growing national conservative strength seems intent not only to keep the cost of labor cheap but shows little concern for the shrinking standards of living of workers, a trail of stepping stones beginning in Mondragon, Spain and running to Cleveland and Silicon Valley is trying and testing the cooperative idea in highly creative ways.

The more obvious consequences of the status quo and conservative leadership can be seen in our huge prison populations, in sections of whole cities patrolled by heavily-armed special police units and, of course there’s the February jobs report. It  shows the ranks of the long-term jobless who have been out of work by 27 weeks has risen  203,000 to 3.8 million.

Since the 1950s Mondragon, in the northern Basque region of Spain, has created a federation of 110 cooperatives, 147 subsidiary companies, eight foundations and a benefit society with total assets of 35.8 billion euros developed over the past fifty years, reports Gar Alperovitz, professor of political economy at the University of Maryland and a founder of The Democracy Collaborative. 

Out of the ashes of cities destroyed by capital mobility such as Cleveland, Detroit and Oakland, new experiments to apply Mondragon’s example are developing through networks of green businesses organized as cooperatives that keep cash flows local by reinvesting savings and making workers stockholders who share decision-making with management. 

The most dramatic  is in Cleveland where community energies have been mobilized to create Evergreen Cooperatives consisting so far of three state of the art cooperative businesses: a commercial scale laundry, a solar panel energy company and a commercial-scale hydroponic greenhouses.  The goal is to create seven more—all located in the inner city.  The design should be applicable anywhere from the Bronx to San Jose’s east side, where gang warfare rages because, of course, there’s no work.  

This issue of Public Liturgies invites serious readers to spend time looking at each of these rather spectacular efforts by clicking below and then viewing the video at each website:

To see the 3.25 acre greenhouse function go to:

http://www.cleveland.com/metro/index.ssf/2013/02/green_city_growers_cooperative.html

For the commercial laundry:

http://evergreencooperatives.com/business/evergreen-laundry/

For the Energy Solar business:

http://evergreencooperatives.com/business/evergreen-energy-solutions/

It has taken all the king’s horses and all the king’s men to organize these cooperatives—The Federal Reserve, the Cleveland Foundation, Cleveland Clinic, City Hall, Gar Alperovitz, and Mondragon.

We’ll comment further about this power array and the feasibility of both its replication and its model in our next blog.