Evolutionary Reconstruction of The Economy -- The Slow, Gentle Road to a Kind of Socialism

There are now 130 million Americans who are involved in co-ops and credit unions, the latter being in possession of $1 trillion in assets. In addition, 10 million Americans are now members of worker-owned companies. Plus, there are now 2000 publicly owned municipal utilities. Indeed, 25% of America's electricity is now produced by these kinds of socialist institutions.

Then too, consider the 5000 quasi-governmental neighborhood corporations involved in housing and economic development. a now 130 million Americans who are involved in co-ops and credit unions, the latter being in possession of $1 trillion in assets. In addition, 10 million Americans are now members of worker-owned companies. Plus, there are now 2000 publicly owned municipal utilities. Indeed, 25% of America's electricity is now produced by these kinds of socialist institutions.

And in 27 states the government owns shares in business startups, some of them already quite successful.

Plus, all citizens in Alaska get their share of oil profits enjoyed in that state. This amounts to $1174 per year, per person.

Finally, many cities are now building hotels and making money on them. More than 450 US cities now own businesses of one kind or another.

In Ohio there are now more worker-owned companies than anywhere else in the country. Here are two examples:

A 3.25 acre hydroponic greenhouse in which 3 million heads of lettuce will be grown each year
A large manufacturer and installer of photovoltaic cells.

These worker-owned companies and others are linked together into one single organization, so that part of their profits go back to the central community organization, which uses this money to start other worker-owned companies. In Cleveland, universities, museums, hospitals (all partially owned by the city of Cleveland) have been persuaded to buy from worker owned businesses as much as possible. And they now spend $3 billion annually in this way.

United Steel Workers, in alliance with Mondragon (the world's largest worker-owned cooperative business), is helping to set up other worker-owned businesses that are sustainable, democratic, participatory and accountable. In other words, they are democratizing wealth by way of building entirely new and different institutions. This is not revolution and it is not reform (which leaves wealth and power where it is.) Rather, it's changing the location of capital ownership, slowly but surely.

Source for all of the above: Gar Alperovitz' new book, What Then Shall We Do? Also, his lecture on Link TV.

Kick-starting the economy by transferring money from the Fed to everyman
Adair Turner is an academic, policymaker and member of the House of Lords. In his new book, "Between Debt and the Devil: Money, Credit, and Fixing Global Finance" (Princeton), Lord Turner argues that countries facing the predicament of onerous debts, low interest rates, and slow growth should consider a radical but alluringly simple option: create more money and hand it out to people. "A government could, for instance, pay $1000 to all citizens by electronic transfer to their commercial bank deposit accounts," Turner writes. People could spend the money as they saw fit: on food, clothes, household goods, vacations, drinking binges--anything they liked. Demand across the economy would get a boost, Turner notes, "and the extent of that stimulus would be broadly proportional to the value of new money created."

The figure of a thousand dollars is meant to be strictly illustrative. It could just as easily be five thousand dollars or ten thousand dollars--however much was needed to drag the economy out of the doldrums. These handouts wouldn't represent tax credits or rebates, which are issued by the Treasury Department. The funding would come from the central bank (in this country, the Federal Reserve), which would exploit its legal right to create money. Central banks do this by printing notes and manufacturing coins, but they can also create money by issuing electronic credits to commercial banks, such as JP Morgan and Citibank. Under Turner's proposal, that's what the Fed would do--give banks newly created money, which would be passed along to their account holders. Merry Christmas, everyone!

It's a deadly serious proposal, actually, and its author is a sixty-year-old English technocrat renowned for his intellect and his independence. Turner has run the Financial Services Authority (roughly, the British equivalent of the Securities and Exchange Commission), the Confederation of British Industry (akin to the U.S. Chamber of Commerce), and the Pensions Commission (think Social Security). For the past two years, he has been a senior fellow at the Institute for New Economic Thinking, a transatlantic think tank that George Soros set up in 2009. If, despite Turner's impressive credentials, the words "hyperinflation," "Weimar Republic," and "Robert Mugabe's Zimbabwe" are whirling around in your head, he would certainly understand. "My proposals will horrify many economists and policymakers, and in particular central bankers," he writes. " 'Printing money' to finance public deficits is a taboo policy. It has indeed almost the status of a mortal sin."

But it's also a proposal that serious economists have broached before. In 1969, Milton Friedman argued that money financing could provide an alternative to Keynesian debt financing. Faced with a chronic shortfall of demand in the economy, Friedman said, the government could print a bunch of money and drop it from helicopters. In 2003, Ben Bernanke, who was then a governor at the Fed, suggested that such "helicopter drops," or their electronic equivalent, could provide the Japanese government with a way to lift its economy out of a decade-long slump. More recently, a number of liberal economists rallying under the banner of "Modern Monetary Theory" have urged the government to reverse budget cuts, financing the spending with money created by the Fed. In Britain, Jeremy Corbyn, the new leader of the Labour Party, has suggested that the Bank of England could pay for some infrastructure spending by printing money.

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