Who Owns America?

“When democracy goes down before monopoly capitalism,” Agar writes, “the result has been a greedy tyranny, preserving all the vices of capitalism and extinguishing its virtues.”

Russell Mokhiber, editor of the Washington, D.C.-based Corporate Crime Reporter, and Robert Weissman, editor of the Washington, D.C.-based Multinational Monitor in 2000 wrote the following about the 1936 published book Who Owns America?

The other day, at our local bookstore, we passed a book. And then doubled back.The book is titled Who Owns America?: A Declaration of Independence. Sounded like it was written by people we should know. But on further investigation, we recognized none of the names on the cover.Who Owns America? was written by 21 “conservative” decentralists. And it was first published in 1936.Re-released this year, with a new introduction by Seton Hall University History Professor Edward S. Shapiro, Who Owns America? (ISI Books, Wilmington, Delaware, 1999), is highly critical of large corporate institutions that controlled the political economy in 1930s America. Its publisher believes the book is as relevant today as the day it was published.Edited by Pulitizer Prize winning Louisville Courier-Journal columnist Herbert Agar and southern poet Allen Tate, Who Owns America? puts forth the type of scathing critique that you just can’t find in today’s political debates.Like today’s corporatist conservatives — George Will, James Glassman and Charles Krauthammer — the conservatives who wrote Who Owns America? believed that the specter of big government threatened individual freedom and the ideal America.But unlike the corporatists of today, Agar, Tate and their colleagues understood that public authority was the only antidote to the excesses of big corporate power.Agar, Tate and their colleagues argued that to attain the conservative goal of less government, you’d first have to limit the size and power of the large corporate institutions that were roaming the land. Typical of the 1930s conservatives writing in this volume is the pro-decentralist economist Richard Ransom.”The permanent lease on life which corporations possess tends more and more to concentrate within a few hands the ownership and control of general property,” wrote Ransom in a chapter titled Corporate and Individual Persons. “The disproportionate distribution of the national wealth is very evidently due in large part to the corporate tendency to mass larger and larger aggregates of ownership which are held together by corporate permanence and corporate inertia. …”Ransom’s solution to the problem of corporate control of the national wealth? Federal chartering of corporations doing interstate business.And what should the states do about excessive corporate power? The states should limit the “profitable business life of the corporations which they charter.”And how could the states accomplish this end?”This could perhaps be done by means of heavy selective inheritance taxation on the transfer of corporate shares or assets,” Ransom answers. And what would this achieve?”Such a shorter term of corporate life, either accomplished indirectly as suggested here or accomplished by more immediate means, will produce a more direct personal responsibility in corporate managements,” Ransom says. Once interstate corporations are federally chartered, Ransom proposes that the personal liability of stockholders should be extended to an amount at least equal to twice the proportionate investment of each stockholder (currently, you can only lose what you put in.)  Can you imagine Will or Krauthammer contemplating these thoughts? Lyle Lanier, a professor of psychology at Vanderbilt University, wrote a chapter titled “Big Business in the Property State,” in which he observed that “the American people have long recognized the danger to democracy of economic power concentrated in the hands of big corporations.”Lawmakers passed the antitrust laws at the turn of the century, “but these laws have been impotent to stem the rising tide of big business organization,” Lanier wrote. Industrial capitalism, Lanier wrote, “has followed a course of development which is both self-destructive and dangerous to democratic institutions.”Lanier, like his co-authors, finds hope in a Jeffersonian ideal of small business and small farmers. The publication of this volume today makes George Will, James Glassman and their conservative contemporaries look like empty suits compared those who wrote Who Owns America?. Big corporations still roam the land and still threaten a fragile democracy. But there is no Agar on the right to challenge them. Needless to say, we cannot and do not agree with everything written by these 21 self-proclaimed “conservatives” of the 1930s. We do agree with the conservative sentiment put forth in the book, as summarized by Agar, that corporate concentration and democracy are at odds.”When democracy goes down before monopoly capitalism,” Agar writes, “the result has been a greedy tyranny, preserving all the vices of capitalism and extinguishing its virtues.”

This is remarkable, very relevant to our current economy/society.

I also find their notion of limiting the lifespan of corporations extremely insightful (and, by the way, a very Christ-like perspective on society).

The Ergonomics of Specialty Farming

Farming is hard physical work….particularly the planting and harvesting of vegetable crops.

Given we are developing an investment fund that will own both farm and value-added production facilities, I’ve begun thinking how we might diversify any given farmer’s work – diversify it in a manner that is healthier for the farmer and increases productivity.

Thinking of this opens a number of business structure questions:

How can a farmer own parts of diverse enterprises? (Co-op, Shareholder, etc.).

How to analyze improvements in farm and food enterprise operations that result from diversifying work and tasks?

How to manage such a structure?

What are the farming opportunities and limitations?

We will put together some financial models for this for investor conversations.

Losers

I consider Wendell Berry a prophet.

Penguin Books has recently published a new collection of his essays (do not see a contents…but think them all previously published???).

It is titled The World-Ending Fire.

He often refers to our present economy as being built on combustion and toxins…so the title is aptly put.

In an interview related to the book’s publication he was asked about his opinion on the recent election of Donald Trump as our American President.

His response was…it didn’t matter if it was Hillary Clinton or Donald Trump….either way he (Wendell Berry) was a loser.

I am personally in the same sinking boat….and over the past few years a number of folks have (very definitely) called me a loser.

Wendell has, for a long time, had both of his feet solidly planted in the compassion based, soil conserving, community building loser class.

I, for a similarly long time, had both my ‘moral’ feet in his space. It is just I had one economic foot  in the ‘combustion and toxin’ economy.

Over the past few years I’ve liquidated the ‘combustion and toxin’ assets to work with younger folks on another economy.

Now – at this point – I diverge a bit from Mr. Berry.

I’ve had a great deal more day-to-day business experience than he, so I see an opportunity to change the economy…and change it pretty rapidly in food enterprises.

Even think I know how to do it!

The previous post on An Enterprise Ethic starts to publish some of the work over the past three years that has helped solidify my reputation as a loser.

An Enterprise Ethic

I have a personal affection for small business.

My life experience indicates that once organizations exceed a certain ‘people size’ they begin to lose quality rapidly (without extremely intelligent and diligent management).

It is very parallel to Wes Jackson’s ‘Eyes to Acres’.

Over the past two years I’ve attempted to define an ethic that might enable more intelligence in small business organizations (and, by the way, I see a tremendous number of small businesses that I think run extremely intelligently and carefully within our current financial and tax structure). My purpose is not to criticize wonderful small businesses. My purpose is to propose a method of organization, management, and financial operation that is more democratic, compassionate, and responsive than the current financial and tax structure in America.

The legal and ownership structure would:

  • De-emphasize property  – which appears to be shallowly materialistic and static in our current financial system – and replace it with dynamic ‘living’ partner accounts.
  • Manage partner accounts through a democratic process and evaluate partner accounts on a periodic (quarterly/semi-annual?) basis for labor inputs, performance measures, and partner financial inputs/outputs.
  • Include performance measures determined for each partner (and any consideration of new partners) on a periodic basis (performance expectations for the coming period). Those performance measures would/could include labor expectations, financial expectations, business development expectations based upon the partner’s expertise and role within the enterprise.
  • Through periodic partner meetings, would reach consensus on current partner account value, partner expectations over the next period, and partner compensation over the next period.
  • Periodic partner meetings would also determine any financing or external agreements necessary for the effective operation of the enterprise – including a compensation methodology.
  • The total of all partner accounts would be equivalent to the sum of the Fund’s cash and liquid assets plus the appraised value of non-liquid assets.
  • All workers within the enterprise are partners – partner accounts would vary depending on the extent of involvement, financial inputs, etc.

I do not think this is necessarily unusual corporate language for partnerships…I do think it is unusual in application…because it becomes complex.

The value of confronting the difficulties is that it creates morally responsible, religiously sound, sustainable organizations.

Cottage Food Laws

Not only can cottage food laws free entrepreneurs from Kafkaesque government inspections, using their own kitchens to bake means they no longer have to rent out commercial kitchens, which can be expensive and not available in every city.

Take Patricia Kline of ipies.

“The biggest barrier to starting a food business is finding and keeping a commercial kitchen,” she remarked.  “And once you do have a kitchen, you have to compete with other food producers who also want to use the space.”  In the middle of her busiest season, Kline once lost her spot at four different commercial kitchens.

But thanks to the cottage food law, she can instead use her own kitchen at her apartment in San Francisco, slashing her costs.  She’s also gained “flexibility in baking:”  “The law has enabled me to take advantage of last minute orders.”

The Forbes Article

Sounds like with some sensible health safeguards home food enterprises can be safe, and very low cost economic development.

The Most Important Economic Stories of 2013 – in 43 Graphs

Maybe it’s just me, but the last few years are getting tough to tell apart. Imagine a quiz question:

Name that year where we threw obstacles in the recovery’s way, but kept growing slowly; where Europe avoided both a disaster and a solution to its mess; and where China kept growing over 7 percent, but didn’t rebalance its economy like it said it wants.

You’d be right to guess 2013. You’d also be right to guess 2012, 2011, or 2010.

So, to remind ourselves what did change in the last 12 months, we asked our favorite economists, journalists, and think-tankers for their favorite charts of the year. The stock market went on a tear, the labor market didn’t, and Wall Street and Main Street came to terms with a New Normal. Without further ado, here are 37,000 words worth of charts to tell the most important stories of 2013.

The Atlantic Report

This is wonderous economic analysis!

The Folks Who Sell You Corn Flakes….

…Take the grain titan Cargill. The largest private company in the U.S., Cargill has gathered and shipped a bulk of the world’s supply of wheat and corn for more than 100 years. Nowadays, however, Cargill also sells billions in derivatives to food companies, and runs two massive hedge funds, managing more than $14 billion for investors. Or take Louis Dreyfus, another major grain trader. In 2008, Dreyfus launched its own fund enabling investors to bet on food prices. By 2011, the fund had grown so fast it stopped accepting new money.

The New Republic Article

“There is no regulation of physical [commodity] markets,” said Mike Masters, founder of Better Markets and a hedge fund manager in Atlanta. “It’s the Wild West, they can do whatever they want and nobody knows.”

Golden Rice…The Food of Politics

golden-rice

Golden Rice is rice that’s been genetically engineered to deliver enough beta carotene to improve the health of the malnourished poor who might eat it. (Deficiencies blind over 250,000 children a year.) It’s a humanitarian project — funded by the Rockefeller and Gates foundations, among others — that has been in development since the 1990s. Some people object to it; they see it as a Trojan Horse that the biotech industry is using to enter countries that might otherwise reject their technology.

The Grist Article

In my humble opinion, this article’s real value is in pointing out the difficulties when one ‘kind’ of people decide their going to solve vast problems for another ‘kind’ of people….the real fool’s gold is the hubris that underlies many technical solutions.

Small Farmers and Environmental Benefits

Many of today’s young farmers (and a good number of older, thoughtful small operators) are committed to farming in a manner that creates minimal environmental harm (I think any human land use, by definition, creates environmental and ecological change to the landscape)…and produces substantial environmental benefits.

Unfortunately, most communities do not provide financial support for these new, small farm environmental benefits. Already in a financially stressed situation, small farmers could realize real improvements in their economy if communities began to 1) value the environmental benefits provided by sustainable small farms, and 2) pay small farmers for the community assets they are creating year after year.

USDA, through its NRCS (Natural Resource Conservation Service), provides incentive payments to farmers. The payments, however, are to address resource concerns…correct an environmental harm or environmental problem (the farmer allows his livestock to pasture in a stream area…NRCS pays for fencing and stream restoration).

With two partner organizations (New Urban Farmers in Pawtucket, RI and the African Alliance Growers Collaborative in Providence, RI) we’ve been working to 1) determine the agro-ecological areas where small farmers are creating environmental benefits, 2) analyze if any of the eco-benefits fit into the structure of USDA NRCS conservation practices and practice payments, 3) if appropriate, expand the payments USDA NRCS is making to small farmers to better align their incentives with the work of small, organic, and urban growers, and 4) examine how other community based agricultural organizations (primarily state conservation districts) might create funds to ‘invest’ in small farm environmental asset building.

From our research, there are six areas where small farmers are creating substantial environmental benefits:

1) Improving the physical, chemical, and biological conditions of soil through compost, mulch, manure, and remineralization practices.

2) Managing nutrients to protect from runoff, improve air quality, and improve production characteristics.

3) Managing weeds and pests with natural methods that improve plant communities/wildlife habitat, enhance the quality of forage, and control pests.

4) Managing water for water control, irrigation, runoff, and water harvesting.

5) Managing farm infrastructure for conservation improvements – tree and shrub establishment, vegetative barriers, etc.

6) Managing farm energy uses to reduce energy use, and improve energy efficiency.

Small farmers are utilizing both novel methods (those developed in the last 30 to 50 years through biodynamic -realizing its’ non-scientific aspects – and permaculture practices utilizing new ecological science) – as well as revisiting old, natural farming processes – to realize their sustainability goals.

These benefits not only increase their farm productivity, they also improve environmental qualities in their communities. They are becoming an increasingly responsible ‘underground’ community of economic asset builders related to those environmental improvements.

Young Farmers Break The Bank…Continued

At the same time that – across the country – restaurants and thoughtful households are demanding local, nutritious, sustainably-grown food, the economy and financial infrastructure for small farmers is feeble and immature. That is especially true for new and socially disadvantaged farmers.

Changing the small farm financial infrastructure is critical to expanding local food production, improving household nutrition, and reducing healthcare costs. USDA through the Farm Service Administration has rethought the FSA loan program to provide more opportunities for small and new farmers. USDA Rural Development has become much more sensitive and helpful to the needs of socially disadvantaged small farmers.

What else can we do?…a few thoughts and suggestions:

1) Small farmers need routes to ownership for their land (we’re doing a tiny bit here with a RI farmland fund). Communities across the nation need to rediscover their small bank infrastructure and use it to build local farm assets.

2) We should pay small farmers for the environmental goods they produce. I’m not talking about correcting resource problems…I’m advocating for local systems for incentive payments to small farmers that build ecosystem assets for themselves and their neighbors.

3) Communities need to begin rebuilding the small farm services infrastructure that existed until perhaps fifty years ago. It’s not a romantic notion to rebuild small farm economies in every community in America…it’s good economic sense!

4) Eat thoughtfully (I’m borrowing from Wendell Berry on this one). We can be the best advocate for the local farm community by buying food and farm products in a thoughtful manner.

5) Establish the educational infrastructure necessary to use the talents of refugee socially disadvantaged populations – who many times have significant farming skills. Language and business/financial education is critical to the success of these new citizens.

6) Rethink how your savings, investments, pensions, etc. are being utilized. Most conventional investment mechanisms used by Wall Street do little to diversify wealth and expand social equity (many would say today’s financial markets do quite the opposite – they are, in essence, wealth concentrators). Invest 3% of your wealth in local farmers and food enterprises….and advocate that your community’s institutions, foundations, etc. do the same!

7) Resist working in thoughtless environments. If your work is not meaningful and honest, find a local farmer or food provider and hook up!

8) Demand honest, sincere, timely decisions from your government representatives. If they are not honest, sincere, and timely, elect someone else. Our current American governmental institutions resist meaningful, important changes that will make us all healthier and happier…we need to work with our neighbors to demand new social policies and institutions that better ensure opportunity for all!