ECONOMIC DEMOCRACY, NOT TOO-FREE ENTERPRISE
by Peter Moss

A bit of history first. Capitalism, successor to feudalism, became so unbearable to the people as to cause Karl Marx and Friedrich Engels to write the Communist Manifesto in 1847, followed by Marx's Das Kapital, published 1867-1894 and still the bible for Marxists, communists, Bolsheviks and socialists. Apparently reacting to the sullied name of capitalism late in the 19th or early in the 20th century, U.S. capitalists gradually changed the name to free enterprise, the market system, and most recently, conservative think tankers are trying to change the name to free-market enterprise. But whatever it is called, capitalism is the rule of rich capitalists, by rich capitalists, for rich capitalists. More importantly, there is a permanent, unobfuscatable diametric opposition between capitalism by any name and democracy, which the proservative Republican President Lincoln cited as government of the people, by the people, for the people. In simple terms, either the top 2% rich rule, or the bottom 98% unrich rule. Sorry but it can't be both. Thus "capitalist democracy" is an oxymoron, a contradiction of terms [for morons]. Soon after WWII, Senator Joe McCarthy of Wisconsin and his aides began a systematic witch hunt for reds and pinkos, and a justifiable demonization of the brutality of Bolshevism. As a result, Americans were presented with a simple choice between good capitalism and evil Bolshevism, but the possibility of any system other than capitalism and Bolshevism has been carefully avoided to this day.

What we have today is not capitalism or free enterprise or free-market enterprise. Today America is ruled by too-free enterprise. The eternal question about this system is: who is free to do what to whom? The answer is: selling unsafe and short lived products, polluting, lying to stockholders, employees and customers, cheating employees, pensioners, the IRS, the creditors and the stock market suckers [everybody who trades without insider information], exploiting and defrauding all of the foregoing, insider loans, insider trading, cooking books, shredding evidence, pleading the 5th, wiping out life savings and pension funds, destroying confidence in the capitalist system and laughing all the way to offshore capital havens, with capitalism's chief cowboy yelping jail, jail, jail on Wall Street. [His "re-building confidence" speech was followed by a 500+ drop in the Down-Jones.] If anybody has not been following this in the corporate media, just look for Internet news and newspapers and magazines in libraries about Adelphia, AES, AOL Time Warner, Arthur Andersen, Bristol-Myers Squibb, Cendant, Citigroup, CMS Energy, Duke Energy, Dynegy, El Paso, Enron, Global Crossing, Halliburton, ImClone, JP Morgan Chase, KPMG, Merck, Merrill Lynch, PricewaterhouseCoopers, Qwest Communications, Reliant Energy, RiteAid, Tyco, Vivendi Universal, World Com, Xerox, and inevitably, thousands more to come. Too-free indeed, to do what to whom? For culprits, amounts, misdeeds, see www.citizenworks.org/enron/corp-scandal.php. Fortunately, a much better system is available and it is called economic democracy. And now, a little bit of personal history. When I was about 5 years old, my father taught me "to live and let live." He then illustrated the point from his own experience. He was managing a large bank in Rumania with about 300 employees, and the time came when he had to reduce payroll by about 10% due to the worldwide depression. Instead of firing 30, he called a meeting of all employees and asked for a show of hands: would everybody agree to a voluntary 10% pay cut or would the employees prefer a layoff of 30. The response for a pay cut was unanimous. And although my father did not call this economic democracy, it was exactly that. In the late 1960s I tried to publish an essay under the title economic democracy but it was a little too early even for avant-garde publishers who said so. Most books are too long to be read or long remembered by most people, so writing books is not very rewarding. Fortunately, before I could write a book, a coworker showed up with a 436-page book titled Economic Democracy, written by Martin Carnoy and Derek Shearer, published in 1980. Antiquarians and libraries have or can get you a copy [Library of Congress catalog #79-55934]. I will not attempt to summarize the book here because the opening sentences do that: "This book is a discussion of and an argument for alternatives to the present structure of production in the United States; alternatives that would change the control of capital and how it is used. The U.S. economy is faced with a set of economic problems that appear to be unsolvable by corporate capitalist development. If changes are to be made, then the way the economy is governed and the way things are produced will have to be changed as well. The essence of such transformation is economic democracy -- the transfer of economic decision making from the few to the many." The authors were reading my mind. Thus economic democracy looks very much like business as we have known it, but with two important differences. (1) Economic democracy serves the public interest, not the deep pockets and large corporations, and it is democratically governed by the public will, as much as possible, by televoting by the whole American electorate at least weekly. We should not have to wait for hydrogen cars until GM finds it more profitable or until ExxonMobil dies or finds hydrogen more profitable. And the miserable CAFE [corporate average fuel efficiency] thanks to sport utility vehicles should not stand because it is defended by the Detroit lobby but should be voted on in a binding national referendum. (2)The biggest difference is that capitalism and communism are both top-down systems: a small and all-powerful grouping, perhaps a few thousand people like the Bohemian Club or the Soviet Bolshevik Party elders make all the economic decisions. By contrast, economic democracy is a bottoms-up system, where all economic decisions are made by practically all the voters. Not that the voters are infallible, but they are a hell of a lot more public interest oriented than Kenneth the bad Lay of Enron infame, or Bernie Evers, XCEO of World Com and their ilk. People are incensed that Evers "borrowed" $300-million from "his" company, same amount the bad Lay insider traded on Enron stock. Now an IBM alumnus tells me Lou Gerstner, XCEO of that BM walked away with $500 million. In this column I can give no more than a couple of examples of how economic democracy will work. For starters, it will legislate and enforce full employment by many devices, like stopping the export of $13 an hour jobs to 13 cents per hour countries, and impose effectively preventive tariffs on goods made by 13-cent labor. It will shorten the work week from 40 hours to 30 or 20 or whatever it takes to have a permanent minimum 5% shortage of employees and control immigration to that end. It will prohibit and prevent stock ownership by top executives who are to be paid by the size of their staff, just as middle managers are now paid. And it will create a legal property right for workers in their jobs, valued at remaining work years till 65, times the average of the last three years' pay. If employers want to fire or lay off, they would have to negotiate an appropriate settlement based on the residual value of the job. After all, you can't take away the livelihood of the butcher or baker or candlestick maker without just compensation. Why should big business have a legal right to do it? Second, in very recalcitrant industries, government will buy or build a competing company. Drug prices too high? A federal drug manufacturing enterprise will make and sell drugs at a reasonable cost plus return on investment and private drug makers can then compete on price. Of course, such a government enterprise will have a royalty free license on all drug patents. Future drug patents will be issued with a free license to the U.S. Government. A third device to ensure full employment is the firing sequence. Each corporation will submit a list of employees in decreasing order of compensation, and when a bankruptcy court approves a necessary payroll reduction of say 10%, the CEO and other top executives will go first until the 10% reduction is achieved. Why? Because it is more just and less harmful to the economy to let the top 10 people go than the bottom thousand. Also, the top 10 fired people can better pay for their food and shelter than the bottom thousand. To say nothing of the fact that the top 10 people are more responsible for the problem than the bottom thousand, and if replaced internally at no increase in payroll, may change course and better the corporation's prognosis. Needless to say, management attitudes will change and layoffs evaporate when layoffs mean layoffs at the top. Economic democracy will pay a living wage to the involuntarily unemployed just as farmers are now paid to not plant so as to maintain commodity prices. Economic democracy will make the top 2% rich temporarily unhappy but it will make the bottom 98% permanently very happy. All it should take is one binding national referendum. If elected, I will propose laws to federalize megacorporate auditing by establishing a corporate audit division (CAD) in the General Accounting Office whose agents would not be beholden to its targets as Arthur Andersen has been. CAD auditors would sit in corporate accounting departments the way revenooers sit in bonded warehouses. They would be paid a percentage bonus for any skulduggery uncovered or prevented. Almost forgotten by Bush and his media: Enron paid no tax in 4 of the last 5 years. That alone suffices to federalize auditing and the proposed GAO CAD should include IRS auditors to insure that all the enrons pay all their taxes. You and I must pay what the enrons don't. No fair. It has also been reported that 37 members of the Bush regime held stock in Enron. Once it is determined whether they sold their stock for $90 or 26 cents, we can determine any misconduct. We don't have to make a choice between big government and law enforcement against the bosses, because the two go together. If elected, I will also propose laws to provide a seamless transition from too-free enterprise to economic democracy; to create disincentives for unjust enrichment and a new crime called abuse of money, part of which is already in the U.S. Code to punish the bribery of officials and candidates but never enforced against campaign financiers and lobbyists. And of course unjust enrichment, already a civil violation, is a very frequent abuse of money. In future columns, we will consider incentives to do wrong, greed, the double meaning of profit, non-price competition, and other evils. Let us recall that the Sherman and Clayton acts to control corporate crime and abuse were enacted in the late 1800s. Since then innumerable regulatory agencies have been created to reign in corporate abuses but we have yet to admit that the primary function of a government of, by and for the people is to expose corporate abuses and punish the abusing individuals with effective deterrents such as using the offenders' vast wealth to reign them in. Drug dealers are punished with forfeiture of all of their assets. If elected, I will introduce legislation to extend forfeiture to the corporate and super-rich violators' gross personal assets and use them to combat their crimes and abuses. As soon as any voter complains of any apparent financial wrongdoing, the suspect executives would be placed in preventive detention until they cough up any and all stolen funds concealed in dummy subsidiaries or offshore financial havens, so the funds may be placed in Treasury accounts for use only in compensating the victims. That will buy more credibility than the Chief Cowboy yelping about nickel and dime year sentences. Time served in preventive detention can be credited against the 5 and 10-year sentences but enabling wrongdoers to conceal their ill-gotten gains should not and will not gain any credibility. Cowboy capitalism and too-free enterprise are ideas whose time has gone. A better world is possible with economic democracy and it can be legislated and enforced in a matter of a few weeks if the voters will it.