Thursday, October 28, 2010

Co-ops; the future of American manufacturing?

Co-ops; the future of American manufacturing?

Could the manufacturing co-ops of Mondrag√≥n, Spain be the model for manufacturing in America in the future? Under current conditions it seems unlikely. America’s vast natural resources have made capitalism the perfect exploiter; men of vision were induced to develop, invent, and risk because the rewards were beyond any prior experience.

After these men of vision had built their dreams on a combination of capital, guts, and skill, not to mention cheap immigrant labor, they had created so much wealth, so much infrastructure that in a democratic country it was impossible that the less rich voters would not figure out how to vote themselves some of that wealth.
And it wasn’t just the wealth alone that had become concentrated; it was the power to control or to at least manipulate the market that had concentrated to the few.

Teddy Roosevelt “broke up the trusts” or at least make a show of it, but in reality he had nothing against a few companies running a whole industry so long as it was controlled by a government he (and his super-evolved elites) controlled.
Thus his cousin F.D.R. allowed pluropolies. “Allowed” is not the right word, he forced smaller businesses out of business so as to better control the few remaining large businesses. This was seen as an efficient way to harness capitalism to create wealth, but regulate it, so as to distribute the wealth that was created. The promise was “every man a king” and in terms of standard of living the average man had access to most of the material goods kings had and a whole lot more in terms of medical treatment and so forth that many kings died not having.

The socialist harnessing of capitalism under F.D.R. did not end right away but continued on until the Clinton administration. During the five decades before Clinton capitalism went from being harnessed to being abused; rather than simply increasing the standard of living and maintaining that standard, it became the American dream to do better than your parents - bigger house more cars and therefore more money. The wages became so much greater than in the third world that it became impossible for American manufacturing to compete with third world manufacturing and its low wages.

A culture that has developed over decades, generations really, can’t be reformed overnight. The culture I’m talking about is the “worker” vs. “the wealthy” class warfare culture that led the unions to destroy their hosts. G.M. workers were getting as much as $80/hr in compensation and their CEO was getting a package just as absurd; figuring out how long it would take for the parasites to destroy the host was like a big mathematical story problem. Once the unions and the management left the station and started picking up speed it was just a matter of time before they collided with overseas competition.

When the common people are used to wealth and they can vote, they are not going to accept any sudden lowering of their standard of living that they can vote away. America, despite her reverses, still has great natural resources and a lot of infrastructure. This means that our dollar, which the 2nd world (Europe, Canada, Australia, and Japan) as well as the 3rd world (everywhere else) is still highly invested in can still be exploited. America, or the Obama administration, will print dollars into existence until the rest of the world won’t play that game any more.

When the rest of the world sees the game is unsustainable then they will demand payment in natural resources and they will get back a percentage of what they put in because payment will be in ever inflating dollars that will have ever decreasing value. The dollar printing game will be over for good. Then it will be hard to get credit, jobs and even food. When it is hard to get food the formerly fat Americans will try to figure out how to make a living without capital, and they will be hungry enough to be humble.

They will be willing to try anything that could work and they will look first to what they know has worked elsewhere. This is why we Catholics who believe in the Mondragon idea, the idea of co-operative ownership, or employee ownership of the company, need to adapt the Mondragon model to American culture and law. Then after such an adaptation we need to offer to assist a start-up co-op in one of the hardest hit areas.

Perhaps we could start a financial co-op that would loan the money to start a manufacturing co-op preferably in the South. I would like to see a wide group of people each put a small amount of money into the financial co-op with the knowledge that the first two or three attempts might run up against resistance from the state, from lawsuits, from the competition, and from unions. It also might be difficult to get Americans to adjust to the idea of solidarity when we are used to looking out for Number One. I would further propose that the financial co-op be run as an American branch of the Mondragon co-op system and the first co-op would be started under the guidance of folks from Mondragon.

Next the men who form the manufacturing co-op need to be men who have worked in manufacturing before and not a bunch of writers and dreamers who probably won’t really work at all, let alone work together. Such folks would be likely to use any imperfection in the co-op as an excuse to cause trouble and even quit. Beyond that they might not have the skills and abilities to work well with their hands as well as the knowledge of the technical aspects of modern manufacturing.

Thirdly, I would propose a top of the line online school so that workers could learn from home without interrupting their work, taking them away from their family or running them into debt. Unlike most technical schools this schooling would have a bit more of a university feel and would leave the student not as “well rounded” as a great books school, but certainly with a bit of the basics of science, history, economics and theology.

Forth, we need to start co-ops now, but we need to get legal protections similar to how corporations were declared “legal persons”. This could be done by getting laws passed, but another way to do it is by developing “case law”. Of course if case law doesn’t go our way we would have to go the legislative route, but the legislative route needs to be proceeded by a groundswell of support. So continuing to get the message out is important, but now is actually a good time to start the ball rolling here in the states.

Maybe we could start in a manufacturing ghost town in a Southern state that has a freshly emptied factory and a ready trained unemployed workforce. If the corporation that has gone overseas won't sell because they don't want competition, then buy the empty factory through eminent domain.Your average conservative will object on private property principals, but what of the rights of the workers who helped build the company, the town that built up around it that is now left high and dry? Yes the company should be justly compensated, but also they should sell.

It should be a small factory in a town that has no other industry. The industry should be one that is still viable. The workforce should be educated and in total agreement with the co-operative system. This is do-able.

Monday, October 25, 2010

To faze out the income tax

To faze out the income tax is a better idea than abolishing it. First of all if you are really interested in getting rid of it then you have to realize that it will create a radical change and that Americans tend to reject radical change. Secondly getting rid of it at a single stroke would leave a whole lot of our most vulnerable in the lurch; folks like our seniors and disabled vets who paid their dues and now deserve our support.

Many professionals like bookkeepers and accountants have built up their life around the income tax and would have to start over with no warning or easing into it. Many business models rely on servicing it and so forth. In other words too many people and their families would be ruined today if the income tax went away today. You might not be sympathetic to their plight, but you should be sensible to their opposition and how desperate you want to make them.

My proposal therefore is to turn the income tax collection, and the services provided by the income tax, over to the states.From that point it would be much easier to faze out a state income tax than a national one. While all the states might start out with the same rate and system within a few years the states would begin to compete for ranking in efficiency and rates would lower.

As the ideal of subsidiarity gains ground there will be a snowballing effect as families redeem their responsibilities from the government. Parents armed with better teaching software will tend to take on more of the education of their children. Now that everyone realizes that the baby boomers are going to bust the government retirement idea we will see more families figuring out how to handle these issues on their own.

Now that the safety, nutrition, and supply of our food has come into question, people have become more interested in growing their own and buying it locally from folks they know. This means less need for the government to have their nose in it, and therefore less need for government. Other than our imported food it is hard to make a case for much of the "inspections" that go on because the companies that produce the food have a greater stake in avoiding media exposure than the government union drone with his rubber stamp.

As to our national defense I think most of the cost of it has to do with the fact that we think we can always make things better by sending our boys overseas. Once we realize that knees on the ground in most cases is more effective than boots on the ground in combating evil, we will send more prayers and less boots overseas. The remaining costs can be raised in the way we used to fund our military with tariffs and a hybrid army of paid professionals and trained volunteers.

The times do not allow for a small military, but we could do much with quite a bit less, especially considering how many of our citizens are armed and what could be done with reserve and national guard units.There are almost no other needs that can only be organized at the national level, and actually the states could be required to keep a proportionate number of state guardsmen at the ready in a standard of readiness overseen by the federal government. This would aproximate the medieval model of knights maintained by nobles who were under a King thus limiting the power of the King (or in our case the federal government)to do anything but organize against an invasion.