Studi Buku Mandiri
THE OWNERSHIP SOLUTION Toward A Shared Capitalism For The Twenty-First Century
Jeff Gates
Nama Mahasiswa / NPM : Mas Wigrantoro Roes Setiyadi / 8605210299
Program Doktor Strategic Management Program Studi Ilmu Manajemen Program Pascasarjana Fakultas Ilmu Ekonomi Universitas Indonesia Oktober 2006
Chapter 1: DISCONNECTED CAPITALISM
Untuk pertama kali dalam sejarah manusia, sistem ekonomi tunggal melingkari bola bumi. Kapitalisme global ini merupakan berita gembira dan berita buruk. Berita gembiranya adalah bahwa lebih dari yang pernah ada sebelumnya, kapitalisme telah membuktikan kapasitasnya untuk menghasilkan kekayaan tak terhitung. Berita buruknya adalah bahwa banyak orang-orang kini dijadikan korban dengan kekerasan yang nampaknya di luar kendali mereka, mencakup suatu globalisasi keuangan yang berkelanjutan yang bermanfaat hanya bagi sebagian kecil orang. Kekuatan yang sama itu bisa dimanfaatkan untuk keuntungan semua orang, tetapi ini akan berakibat hanya jika, ketika lebih banyak dari kita menjadi terhubung ke kapitalisme- sebagai kapitalis. Sebagai pasar perekonomian yang terbesar di dunia, Amerika Serikat menyediakan sebuah contoh yang dramatis mengenai bagaimana kapitalisme modern dengan cepat menjadi “terputus” dari mereka yang hidup di tengah-tengahnya. Fidelity Management dan Research Company mengatur lebih dari enam ratus milyar dollar dalam asset (modal); Boston’s State Street Bank mangatur tiga ratus milyar dollar. Manajemen keuangan yang terfokus pada memaksimalkan pengembalian keuangan bukanlah hal yang baru. Yang baru adalah skala luas dan pertumbuhan yang meroket dari jaman “terputusnya” modal. Yang juga baru adalah diberi penghormatan yang sangat besar, informasi tercermin dalam pengembalian keuangan, khususnya ketika seseorang menganggap bagaimana dramatisnya hidup manusia dipengaruhi oleh keputusankeputusan berdasar angka-angka tersebut. Itu meliputi struktur sosial bangsa, termasuk luasnya jarak antara kaya dan miskin; lingkungan; dan angka pertumbuhan rumah tangga yang tetap, menghilangkan proses akumulasi kekayaan seluruhnya yang pada gilirannya menjadi tanggung jawab pada dukungan pemerintah. Terputusnya modal merupakan perolehan daya gerak di seluruh dunia sebagai pemerintahan yang menjalankan rencana pensiun dan meningkatkan dorongan untuk tabungan pensiun. Pertumbuhan global dalam perbedaan ekonomi dan terputusnya modal menciptakan barisan tantangan terhadap kesehatan seluruh bangsa dan tentu saja pada kapitalisme global. Luasnya jarak antara miskin dan kaya ini dikenal dengan implikasi sosial dan politik. Dua tingkat sosial dan dua tingkat pasar bukanlah lahan subur dimana demokrasi
secara sempurna berakar. Sejarawan memiliki dokumentasi panjang yang berisi sikap ancaman untuk membuka sistem dengan perbedaan yang ekstrim pada kekayaan, seperti pemilikan kekayaan yang besar dengan memberikan sedikit kekuatan mereka, yang mana mereka mungkin tergoda untuk digunakan mencapai kesejahteraan umum. Kekurangan “sistemik” yang utama pada kapitalisme saat ini adalah salahnya “umpan balik” sistem. Sistem tidak terhubungan secara otomatis, jika menginginkan untuk mendahului dan merespon keinginan dari populasi di dalamnya. Melainkan mencerminkan modal keuangan yang ganjil. Hal ini bermanfaat untuk memanggil kembali konsep bahwa perusahaan bebas (free enterprise) merupakan sebuah pikiran umpan balik pada dua abad yang lalu ketika Adam Smith, mengeluarkan “The Wealth of Nations” dengan cerita perumpamaannya mengenai bagaimana pasar “invisible hand” dari pertukaran sukarela dan secara bebas menentukan kepastian harga bagi pesertanya. Chapter 2: RECONSTRUCTING CAPITALISM
The Ownership Solution tidaklah diharapkan sebagai kritik kapitalisme. Hal tersebut sangat berlawanan. Seperti peringatan presiden Czech, Vaclav Havel: “Manusia saat ini mengetahui bahwa mereka hanya dapat terselamatkan oleh sebuah tipe baru dari tanggung jawab global. Hanya satu penjelasan kecil yang menghilang: bahwa tanggung jawab harus ditanggung dengan ikhlas.” Di lain hal, sebagian besar manusia tidak dapat tinggal di bagian luar kesatuan perusahaan, terhubung hanya sebagai pelanggan dan pemegang kerja, dan mengharapkan untuk ikut menanggung tanggung jawab atas tindakannya. Hal itu memaksa arsitek perusahaan bebas (free enterprise), seperti pemimpin bisnis, pembuat kebijakan, menanggung tanggung jawab untuk memastikan bahwa penyelarasan, lokalisir, kepemilikan yang “up-close” menjadi kenyataan keseharian dalam hidup. Benar bahwa penyertaan kepemilikan merupakan “pembayaran masuk” yang diperlukan sebelum orang pantas menanggung tanggung jawab mereka. Havel menyerukan sebuah tipe baru dari tanggung jawab global yang hanya dapat muncul dari kumpulan tenaga dari banyak individu yang dikuasakan menjadi tanggung jawab setempat (locally responsible). Pemikiran tersebut tercermin dalam prinsip “percabangan” yang secara sederhana menyatakan
bahwa masalah tersebut harus
terpecahkan tidak lebih dari tingkatan lokal yang memungkinkan. Selengkapnya dalam prinsip tersebut adalah sebuah paradoks: negara harus menciptakan sebuah lingkungan dimana tanggung jawab personal dapat diterima dengan benar. Oleh karena jangkauan pasar uang yang global, kita berada di tengah-tengah penjualan yang sangat besar dari aset milik negara. Itu menjadi tanda penyakit bagi mereka yang percaya bahwa kapitalisme secara mati-matian menjadi lebih luas terpopulasi dengan kapitalis. Hal itu dikarenakan dalam ekonomi pasar, yang kaya semakin kaya, sejak investasi berdasaarkan uang. Itu akan menjadi sejarah yang ironis. Jalur menuju format usaha bebas (free-enterprise), demokrasi yang sempurna dan bertahan lama berada dalam perancangan strategi kepemilikan yang sangat partisipatif dan mampu beradaptasi melintasi suatu jangkauan luas lingkungan ekonomi dan politik. Vaclav Havel menangkap dengan baik waktu-waktu unik dimana kita hidup: “Saat ini, lebih dari yang pernah ada sebelumnya dalam sejarah umat manusia, semua hal saling berkaitan. Oleh karena itu, nilai-nilai dan prospek-prospek dari peradaban di jaman ini dimana-mana diuji dengan baik.” Uji yang paling dalam saat ini – secara moral, secara ekonomi, secara sosial – apakah kapitalisme global dapat dibujuk untuk menciptakan orang kaya lebih banyak and sedikit orang miskin. Bahwasanya, pada gilirannya, menentukan nasib demokrasi – yang mana tidak akan pernah menyadari potensi yang sepenuhnya sampai didasarkan pada sebuah fondasi ekonomi dimana unsurnya adalah sepenuhnya peserta, tidak hanya pemberi gaji dan pemberi suara.
Chapter 3: WHY DOES CAPITALISM CREATE SO FEW CAPITALISTS?
Kapitalisme telah lama terkenal sebagai pencipta yang buruk dari kapitalis. Apakah kita memperhatikan negara-negara kapitalis yang berkedudukan kuat atau usaha mereka untuk lepas dari sosialis masa lampau, fakta menunjukkan bahwa: kapitalisme tidak dirancang untuk menciptakan kapitalis lebih; namun dirancang untuk lebih membiayai modal untuk kapitalis yang ada. Ini karena pembiayaan terpenuhi di dalam sebuah “sistem tertutup.” Sebuah perusahaan hanya memiliki dua sumber dana, yaitu: menghasilkan secara internal dan kenaikan secara eksternal. Dana secara internal dihasilkan dari dua komponen. Yang pertama, diinvestasikan kembali dalam pendapatan dan laba – dana suatu perusahaan berfungsi untuk mempertahankan pertumbuhan bisnis tersebut. Yang kedua adalah cadangan penyusutan – dana itu untuk menggantikan aset fisik yang digunakan atau telah usang. Sumber dana yang ketiga dan keempat adalah pertumbuhan uang diluar perusahaan. Mengapa sebagian besar kepemilikan tertutup bagi orang diluar perusahaan? Hal tersebut dikarenakan: pertama, laba dan pendapatan yang dihasilkan oleh suatu perusahaan milik mereka yang pada saat ini memiliki perusahaan itu; kedua, aset yang memenuhi syarat untuk penyusutan hanya setelah pemilik meletakkan aset untuk digunakan, karena hanya mereka yang memiliki akses pada jaminan dan arus kas yang diwajibkan untuk mengamankan dan melayani hutang. Alfred D. Chandler Jr, sejarawan bisnis secara formal dari Harvard Business School, menyimpulkan bahwa komponen dari tabungan yang benar-benar dihitung untuk pertumbuhan ekonomi bukanlah tabungan pribadi sebanyak seperti tabungan usaha – yang membiayai kebangkitan perusahaan secara internal. Hal ini merupakan sebuah kritikan nyata karena tabungan usaha “muncul” dalam ekonomi kepunyaan pemilik saat ini, sepenuhnya kepemilikan – memusat pada keuangan sistem tertutup. Sebagai penggantian aset, aset tersebut menghasilkan pendapatan lebih dan penyusutan lebih yang menciptakan tabungan usaha lebih – dan seterusnya dalam sebuah proses yang lebih lanjut cukup untuk menjadi terobosan peristiwa ini.
Dengan tanpa melihat apakah pembiayaan tersusun untuk membawa aset baru segaris, untuk memindahkan kepemilikan dari aset yang ada atau untuk menggabungkan aset tersebut dengan perusahaan lain, sasaran kepemilikan yang sama: tujuan dari pembiayaan adalah untuk membolehkan orang mendapatkan aset sebelum mereka memiliki simpanan dana untuk membayar mereka. Teknik self-financing secara luas lazimnya dapat bermanfaat bagi warganegara. Sejarah terbaru mengkonfirmasikan bahwa, tanpa suatu kombinasi kepemimpinan perusahaan dan kebijakan masukan, peristiwa ini akan berlanjut untuk menciptakan beberapa kepemilikan. Tantangan kepemilikan dapat ditanggulangi. Bagaimanapun, karena kapitalisme untuk menciptakan kapitalis lebih, diperlukan suatu pengetahuan pembiayaan dan politik yang bertautan dengan penduduk, kecerdasan pembiayaan pemimpin politik dan perhatian pemimpin pada sektor perusahaan. Pembaharuan dan regenerasi adalah pusat dari keuangan, terutama sekali melalui penyusutan sebagai penengah dengan suatu generasi teknologi online. Teknologi produktif modern (mekanis, kimia, informasi, organisasi) telah sukses luar biasa pada penekanan jam kerja – yang secara berkesinambungan tidak memberi kuasa terhadap siapa yang bekerja saat pemberian kuasa terhadap siapa yang memiliki. Sementara itu, pasar tentu saja tetap acuh tak acuh. Ini secara sederhana menilai daya produksi, mengarahkan pendapatan kepada siapa saja yang menghasilkan, dengan mengabaikan apakah tenaga terampil atau aset tabungan pekerja.
Chapter 4: PUTTING THE “OWN” BACK IN OWNERSHIP
Lebih dari dua dekade yang lalu, kapitalisme menurut sejarah terpusat pada kepemilikan pribadi (personal ownership) telah dihubungkan dengan suatu yang baru dan hingga kini format pengertian sederhana dari kekayaan terpusat: konsentrasi di tangan lembaga investor. Kelembagaan yang sama sedang dijalankan di negara lain ketika tiga faktor pokok bertemu. Pertama, Perang Dunia II ledakan populasi yang sekarang mulai memasuki tahun utamanya, mendekati periode ketika “siklus kehidupan uang tabungan” menjangkau puncak mereka, seperti yang diramalkan ahli ekonomi, Franco Modigliani. Kedua, pembuat kebijakan di dunia sibuk menetapkan kebijakan untuk tabungan pensiun – baik sebagai alat untuk menghimpun dana investasi maupun sebagai jalan untuk memajukan kepercayaan diri sebagai suatu alternatif menuju program pemerintah. Faktor ketiga, sedang dalam pengerjaan. Hukum warisan mendorong orang-orang kaya untuk meninggalkan sejumlah besar harta untuk lembaga non-profit, terutama yayasan. Bill Gates telah mengumumkan tujuannya untuk memindahkan sebagian besar keuntungannya untuk sebuah yayasan. Pertumbuhan terus melaju, kelembagaan datang sebagai kejutan bagi yang menciptakan kebijakan lingkungan yang mempengaruhi perubahan ini. Sebagai contoh, banyak ahli ekonomi dari Timur dan Pusat Eropa menghimpun dana bersama sebagai komponen kunci dari strategi privatisasi mereka, melaju dari kapitalis sebelumnya, era sosialis “pengkolektifan” secara langsung menuju pos kapitalis “kelembagaan.” Satu dari hal-hal penting yang dihadapi kapitalis modern adalah penentuan dari apa yang dimaksud “kepunyaan” ketika kepemilikan dilembagakan. Berkomentar mengenai apa yang disebut ahli ekonomi dilema “agency cost”, Professor Lester Thurow di M.I.T. Sloan School of Management menyarankan: “jalan satu-satunya bagi kapitalisme untuk dapat bekerja adalah pemilik harus ikut bertanggung jawab.” Di tahun 1996, Perusahaan William M. Mercer mensurvei 608 perusahaan dan menemukan bahwa tipe perusahaan besar (dengan pendapatan lebih dari seratus juta dollar) memiliki lima persen simpanan bagian saham untuk eksekutif puncak. Secara khas pertimbangan untuk upah eksekutif terkemas dalam beberapa varian pada “great man theory”, yang menyatakan bahwa
seorang pemimpin perusahaan yang baik diperlukan untuk memikat modal dari satu investasi ke investasi lain – meningkatkan nilai saham. Di dalam kombinasi, pengertian yang mendalam menunjukkan bahwa lembaga investor fokus pada “struktur yang tidak terlihat” dari perusahaan, mencakup penentuan sikap dan kumpulan informasi yang berhubungan dengan kelalaian perusahaan pada risiko mereka. Bukti menunjukkan bahwa konsep dalam dan luar yang menyangkut perusahaan dapat berhasil. Bagi mereka yang menyamakan kepemilikan dengan kendali, adalah jelas bahwa kendali dalam dunia pengaturan-uang telah tercerai dari model sederhana yang diimpikan oleh Adam Smith. The Ownership Solution menyarankan ketahanan, dengan ukuran apapun, memerlukan lembaga investor untuk mendesak agar “kepunyaan” diletakkan kembali pada kepemilikan. Hal itu dapat berhasil dengan menghubungkan kembali manusia pada umpan balik dasar dari sistem, kita menyebutnya dengan kapitalisme.
Chapter 5: UP-CLOSE CAPITALISM – THE EMPLOYEE OWNERSHIP SOLUTION
ESOP (Enterprise Share Ownership Plans) merupakan solusi kepemilikan baru yang tampak paling menyolok. Dalam sebuah “pengaruh” ESOP (dimana saham dibeli dengan menggunakan dana pinjaman), empat bagian yang secara khusus terlibat: karyawan, perusahaan sponsor, penjual, dan pemberi pinjaman. Insentif tersedia untuk masingmasing bagian. Bagi karyawan, hitungan saham tidak kena pajak sampai diterima. Bagi perusahaan, potongan pajak dibolehkan bukan hanya untuk biaya bunga pada dana pinjaman yang digunakan sebuah ESOP namun juga untuk biaya dari pembayaran kembali pinjaman utama. Ditambah pengurangan pajak karyawan dibolehkan untuk pembayaran dividen atas pemegang saham ESOP sebagai jalan untuk menghasilkan suatu kepemilikan dasar “pendapatan kedua” – kunci Kelso – dasar pemikiran dari ESOP. Kepemilikan karyawan bukanlah tanpa resiko. Selama pengumpan ragu-ragu bahwa karyawan akan “meletakkan semua telur ke dalam keranjang,” para pendukung khawatir bahwa karyawan tidak mempunyai sama sekali telur dalam keranjangnya. Ini hal kecil yang menggambarkan bahwa kepemilikan karyawan itu sendiri dapat dilakukan untuk membatasi perusahaan dari persaingan, perubahan teknologi, atau pergeseran pasar. Ada hal “ajaib” tentang kepemilikan saham karyawan jika perusahaan melakukan kesalahan bisnis. Dilain hal, beberapa perusahaan merengkuh kepemilikan karyawan sebagai komponen dari strategi daya saing mereka, memberi gambaran bahwa berhadapan dengan risiko kepemilikan karyawan jadi lebih mungkin untuk memperlihatkan arah yang bersifat wirausaha dan fleksibilitas diperlukan untuk mengidentifikasi dan membuat perubahan, diperlukan perubahan teknologi dan pergeseran pasar. Mackin, pendiri Cambride, Massachusetts-based Ownership Associates, menemukan bahwa manajer dan pekerja sering menduduki tempat yang berbeda, tidak seimbangnya hak atau tanggung jawab. Manajemen secara khusus positif tentang tanggung jawab dan risiko dari kepemilikan karyawan namun negatif tentang hak dan penghargaan. Pesan mengenai kebingungan mereka kepada manajemen: “ hargai saya seperti seorang pemilik namun perlakukan saya seperti seorang karyawan.” Mackin menyimpulkan bahwa perbaikan akan mendorong percakapan kepemilikan ini semakin panjang sehingga kedua
dapat disimpulkan sebagai kultur tempat kerja yang secara tetap bergeser menjadi sebuah kultur kepemilikan. Terdapat salah satu kunci tantangan menghadapi kapitalisme. Berbagai format dari upclose kapitalime dengan baik menghadirkan harapan terbaik kapitalisme untuk mencapai kesetiaan, motivasi, dedikasi, dan pengorbanan yang diperlukan oleh usaha bebas untuk kesuksesan jangka panjang. Walaupun begitu tantangan belum dapat diukur. Tantangan-tantangan lain: selama manajer menengah harus dipercayakan untuk membuat perubahan, mereka boleh memiliki sedikit saham. Hal itu mendorong mereka untuk melakukan apa yang memungkinkan suatu perubahan, termasuk perubahan yang mungkin menurunkan peringkat manajemen dan mengubah otoritas manajer. Dan kepemilikan karyawan merupakan suatu biaya efektif utama untuk mengarahkan sumber kebijakan yang terbatas. Lingkungan kebijakan terbangun dengan baik sebelum up-close kapitalisme mempertimbangkan tujuan yang diinginkan dan memungkinkan.
Chapter 6: NEW PROPERTY PARADIGMS
More than one hundred countries have an active interest in adapting ESOPs. Many are well advanced. However, it is the growing use of ESOPs in multinational corporation that offers potentially the most powerful short-term tool for spreading up-close ownership worldwide. This trend is certain to accelerate as both capital and trade flow ever more freely. An obvious ownership challenge accompanies this trend: how best to encourage these cross-border firms to include indigenous employees as partial owners of parentcompany shares. RESOPs (Related Enterprise Share Ownership Plans) provide an opportunity for employees of smaller companies to gain an ownership stake in larger, more established companies. From an ownership perspective, ESOP/RESOP solution enabled a broad base of Jamaican workers to accumulate capital in a well-established Jamaican company. Indeed, many of the micro enterprise employees would not be employed but for their economic relationship with the larger firm. The RESOP also represents a natural extension of the ESOP idea, expanding not only the definition of “employee” but also utilizing the ESOP notion of “self-financing” to benefit a broader network of those who add value to the firms’ operations. Certain customer groups offer another potential “natural owner.” As investment bankers know so well, practically any revenue stream can be used to “owner-ize” incomeproducing assets over time. From a financial perspective, the value of a company is to be liquidated and its assets sold. Much as water moves through a whirlpool and creates it at the same time, the cash flowing through an enterprise both creates and sustains its financial value is based on its customers paying their bills for their access to energy or water. Without their patronage, the company’s financial value as a going concern would quickly disappear. The goal of the CSOP (Customer Stock Ownership Plan) is to craft a capital structure that will capture some portion of that value for those whose patronage maintains that value. The developing world offers rich opportunities for ESOP/CSOP combinations particularly with the worldwide boom in infrastructure development, such as power generation.
A variation of the CSOP is under consideration in conjunction with the politically sensitive privatization of the British Broadcasting Corporation. In conjunction with the former head of news and current affairs at the BBC, we proposed the “stake ownerization” of the BBC, using an ESOP and a VSOP (Viewer Share Ownership Plan) plus an equity stake for the BBC’s independent producers. Applying my owner-ization credo (“where the cash flows, ownership grows”), I proposed an obvious ownership strategy: gradually convert that revenue stream into BBC shares for BBC viewers. ESOP-like self-financing techniques can also be used to expand ownership beyond economic relationships based either on employment or consumption. One such mechanism is the GSOC (General Stock Ownership Corporation), in which ownership is based on geography or citizenship. In the only version of the GSOC thus far enacted into federal law (in 1978), a for-profit corporation chartered by a state prior to 1984 could operate tax-free provided it complied with the ESOP’s three operational principles; namely, a GSOC must 1. Include as a shareholder each citizen of the chartering state, reflecting the ESOP concept’s “democratic” principle of widespread participation.
2. Limit individual ownership to ten shares, reflecting the ESOP “antimonopoly” principle ensuring that limits are imposed on relative shareholdings.
3. Pay out 90 percent of the company’s earnings to shareholders on a current distribution of income to the company’s owners.
DSOP (Depositor Share Ownership Plan) seems that depositors are often receptive to the motion of owning shares where they bank. That makes sense. If someone has sufficient confidence to trust a bank with his or her savings, the bank may be able to draw on that goodwill to persuades those customers to buy its shares. In Speakman view, a bank privatization that includes an ESOP/DSOP component could create a positive outcome for everyone involved. The government would be seen as supporting a privatization technique that advances broad-based ownership; banks would gain an opportunity to strengthen both employee and customer loyalty; and the customers
would become more knowledgeable up-close capitalists – both as savers and as potential borrowers, secure in the knowledge that their borrowing enhances the earning of a bank in which they own a stake.
Each of these new property paradigms (ESOPs, GESOPs, RESOPs, CSOPs, VSOPs, GSOPs, DSOPs, etc) share a common goal: the transformation of economic relationships in a way that enhances performance and sustainability across a wide range of measures. This combination requires a combination of financial creativity, committed corporate leadership and sustained political will, along with a populace prepared to embrace change, complexity and risk.
Chapter 7: TOWARD A WORKABLE WORK ETHIC
Reflecting a combination of both morality and the market, the work ethic is captured in the Greek word compensation, meaning “a balancing of accounts,” suggesting that a person is entitled to take out of the economy according to what he or she puts in. Usually that input is labor. The ethics of balance embodied in the work ethic under gird economic policy making worldwide, where “full employment” remains a key goal, regardless of whether the economy is socialist, a capitalist, developed, underdeveloped or somewhere in between. On the other hand, certain types of human capital are becoming more valuable, particularly those associated with the development of information technology (IT). In the early nineteenth century, the spread of labor-saving looms caused displaced workers to respond by attempting to destroy that era’s technological advances. Today’s Luddites, secretive rebels who followed Ned Ludd, point out that information technology (computer software, networked computers, advanced telecom equipment) is different in at least three significant ways. First, the impact of IT is not limited to one segment of economy, such as Luddite weavers. Second, IT is being phased in much faster than were mechanical looms, particularly as measured by the plummeting price of computer power and its pervasive reach into the service sector. Lastly, IT makes work far more portable, often negating the need for personal contact with customers or even with employers. The impact is further amplified by the spread of new organizational systems. In truth, the widespread prevalence of productive, labor-saving technologies, including information technology, could provide a foundation of security as leisure for a broad base of those living in developed economies. Today’s fixation on jobs continues to erode the ability of people to orient themselves. In an age when the workplace reality is a twentyfirst-century world of capital-and knowledge-intensive, information-processing, laborsaving technology, policymakers in both the public and private sectors continue to rely on outdated, outmoded nineteenth-century interpretation of how to participate effectively in a market economy.
Buckminster Fuller, futurist, philosopher, engineer, and author, coined a term that aptly describes what is happening to the world of work: he labeled this process “comprehensive emphemeralization, the process of doing more with less.” As he explained: “Since World War I, the world has turned from the wire to the wireless, the track to the trackless, the visible structure. In each instance, man is able to do more with less and less and less.” Information technology accelerates this trend so that, increasingly, we are living in an intangible economy in which amusement, beauty, pleasure, beams and cotton bales of an earlier era. In a social and political environment firmly wedded both to the work ethic and political equality the challenge lies in figuring out what a nation’s people are to do as the “doingness” of production is done lee and less with involvement of human power and more and more with the productive power (and knowledge) embodied in their culture’s tools, including its information and networking technologies and its remarkable array of congealed knowledge. This steady decoupling of productive output from human input has been ongoing at least since the dawn of the industrial revolution. However, even though our systems for accomplishing work have evolved is astonishing ways, we have yet to devise genuinely systems-wise means for connecting people to the work that is done. While it is clearly time to focus on preparing people for a more global form of capitalism, it is also clear that the time has arrived to prepare capitalism for people. Full employment policies will continue to be essential, but they are no longer sufficient. The challenges lies in how to update the work ethic to make it relevant to the realities of modern production. A modern form of economic connectivity is long overdue.
Chapter 8: REINVENTING LABOR UNIONS
From the perspective of the unions’ attempt to regain robustness in setting the national social agenda, one of the most intriguing aspects of this strategy is its potential to foster an allegiance to the union movement that is much stronger than now exists with any employer. In setting out what he calls the “New Rules for the New Economy,” Kevin Kelly (editor of Wired) suggests: “We are headed into an era when both workers and consumers will feel more loyalty to a network than to any ordinary firm.” Labor’s challenge in this new economy is to help build an empowering network that earns the loyalty of those now struggling to stay afloat in a turbulent sea of change and in a workaday world comprised of what Kelly calls “patchworks of vocations.” Arguably, workers of all stripes have never needed unions more than they do now. But the need is not for yesterday’s job myopic labor agenda. The manufacturing sector, long the bastion of trade unionists, is certain to continue its steady decline in employment – at least absent some fundamental shift in the terms of trade and the pace of technological change. We are witnesses to a century-long evolution in production and politics that is finally fusing the forces of labor-saving technology, global capital markets and free trade. That combination, long seen as threatening to the interests of labor, could yet become the capstone of labor’s century-long struggle. However, that requires a labor movement willing to get smarter about ownership, including ensuring that its members gain a stake in those income-producing assets with which they are being displaced. Full employment is no longer sufficient as a goal-not for labor, not for business and certainly not for national policymakers. The need is for leaders-in labor, business and politics-with a broader view of economic participation and a more comprehensive vision of what solidarity really means. The consequences for social cohesion could be grave if labor leadership fails to quickly fashion a vision and a plan in response to this fast-emerging commercial world in which trade and finance are reorganizing the globe into a unified marketplace. A vision is simply values projected into the future. Labor challenge lies in ensuring that the future it envision is engineered to reflect the values that it holds most dear.
The emerging global capitalism that confronts labor is still immature, animated by an internal logic that has succeeded in identifying the greatest possible return precisely because it fails to account for the multidimensional consequences incurred in generating those returns. In evaluating its effect in certain areas, such as the environment, its performance seems akin to an oblivious child playing with razor blades and badly in need of parental guidance. A newly energized, owner-ized and visionary labor movement, informed and motivated by a broader frame of reference, and empowered by the rights and responsibilities attending ownership, may be just what needed to restore a measure of prudence, care and foresight. At present, the abstract and largely indifferent forces at work in the commercial domain are on verge of creating a hierarchy of concentrated economic power that will define the nature of global commerce for the next century. A failure to act now could prove fateful as the atomizing nature of the marketplace further divorces people from responsibility for their actions, and as financial self interest diverges ever more widely from the broader moral purpose. Chapter 9: MAKING MONEY
With increasing frequency, the possession of money requires possession of either (a) high-value human capital (such as that residing in “symbolic analysts”) or (b) nonhuman capital – machinery and equipment, chemical processes, computer software and such. Nature takes care of the distribution of human capital valuable in the marketplace may require decades of investment (for instance, my law degree culminated nineteen years of continuous schooling). For access to nonhuman capital, nature is not nearly so democratic . in that realm, wealth and poverty begets poverty because investments in either physical or human capital depend on current income. The creation of money is not some inscrutable mystery. Reserve banking retain its original function: facilitating the availability of credit through member banks who (quite literally) are granted a franchise to print money. Operating in coordination with the Treasury and the Bureau of Engraving and Printing (where money is physically made), the politically independent Fed has enormous latitude and profound power. The twelve
member bank soon formed an investment committee so that the commercial banks could purchase government bonds for their own portfolios. Initially, the impact of this arrangement was not well understood, even though their bond purchases expanded the amount of money in circulation as the federal government found it could easily money (to build canals, levies, etc.) by selling its bonds to the banks. The impact of monetary policy is widely felt – on the affordability of home mortgages, the feasibility of business expansion, job creation and so forth. This creates an ongoing dilemma for central bankers who are in constant need of a supportive constituency, particularly during times when credit constraint – never popular – is essential to longterm monetary stability. An ownership pattern-sensitive reserve-banking policy could help build that constituency. That’s because, as a group, capital owners are the most consistently vocal in their opposition to inflation, the bane of central bankers worldwide. A reserve banking policy aimed at consciously broadening the base of those with a direct stake in the conduct of monetary affairs could only help central bankers in their role of insisting on prudence when others are pushing for expansion. Communities is the purpose of politics. However, money and credit, with their overarching influence, can undermine the best of community-building intentions. With increasing frequency, globalization means that local, regional and even national governments are under pressure to put aside policies designed for the common good – of local people, local business, local cultures, and local environments. To conclude where we began: money is a medium through which the economic system communicates with its participants. With no will of its own, it simply responds to the values of those who own or have access to it – or those to whom it is entrusted. Our current money-dominated feedback mechanism is failing us because it fails to signal us that something is fundamentally amiss. As well shall see in the next two chapters, in the absence of a redesign of current financing techniques, the ever freer flow of financial capital is unlikely to contribute to the building of community, either within or among nations. And sustainability – by whatever measure – will continue to lie beyond our grasp.
Chapter 10: CAPITALISM AS IF OUR CHILDREN MATTERED
Policy focus on two fronts. The first is how best to ensure that the market values genuinely clean growth, particularly in a pricing environment (product pricing, share pricing) that largely ignores environmental costs. The second is how to open free enterprise to broader, more equitable participation. Such company environments do not emerge spontaneously. That would be like expecting an office building to construct itself without the aid of an architect, engineer or construction company. Participative systems require ongoing organizational and financial engineering, along with a leadership corps committed both to the goals (profitability and sustainability) and to the means chosen to achieve those goals. Cyclical production will need to be both a constituency for change and a constituency empowered to effect that change. However, most people remain connected to their economy by only the most tenuous of threads: a job. Imposing environmental chares on corporations forces a difficult choice, particularly where the cost of labor may already be the firm’s most controllable expense. The uncomfortable truth is that a new round of environmental costs or regulations may be accompanied by yet another round of layoffs and labor retrenchments.
It’s difficult to argue with the science suggesting that production systems must evolve into “closed systems,” with a rigorous redesign of both inputs and outputs. That laudable goal, I submit, is more likely to be achieved as our organizational systems become increasingly “open” – incorporating feedback from those whose lives the firm affects. In my ownership “systems” view of succeed in transforming a company stakeholders into property-empowered shareowners. As a firm’s “natural owners” become genuine owners, the needed “greening” of production will gain acceptability, adaptability, and hands-on support. The silver lining in the challenge of sustainability lies in the potential it holds for awakening mankind to a more holistic way of thinking, and to the necessity of reflecting this thinking in the reengineering of his laws and institutions. This awakening could come
remarkably quickly, particularly as communications reach ever more broadly into the world community and shape the very image that man has of himself and his place in the web of life. ecologists recommend a very simple personal standard for people to keep in mind whenever contemplating an action that may have environmental consequences of up-close ownership patterns: “what if everyone did it?”
Chapter 11:
A new synthesis is emerging, one that views ownership matter-of-factly as a social tool for linking people not only to things but also to each other, to their community and to their endangered environment. With the benefit of hindsight, policymakers in both the public and private sector can sort through history’s dustbin of failed ownership solutions and construct a political and commercial environment that evokes the best features of those that flourished, while avoiding those that failed. Where successful, this ownership engineering will succeed in incorporating the best features of capitalism while answering the charges of capitalism’s harshest critics. This is not meant to suggest that other components of a nation’s social capital are unimportant – families, civic associations and such. However, I contend that a poorly conceived ownership policy is certain to undermine attempts to strengthen civil society. Corporate leader must be able to set out a broad vision and create a culture of commitment. Today’s high-impact management practices include not only the standard, contractual issues of pay and benefits but also how to create a workplace environment where employees have an opportunity to develop their full human potential. Generation X is particularly emphatic that interesting work, not just money and position, is a key motivator. The corporate entity is destined to become even more prevalent. Visionary corporate leaders may yet emerge as our first true global leaders. The steady of this relatively new organizational entity suggest the gradual emergence of a new notion of community, one very different from its original connotation as a geographically specific “place.” Today’s large companies often have production and service sites spread across the globe. To create a sense of community around such a dispersed workforce suggests the need for mechanisms capable of fostering a place-transcendent notion of belonging. Where successful, the payoffs can be quite substantial. With the corporate entity now the world’s most prevalent organizational tool, it is essential that this tool become as convivial as possible. The evidence suggest that efforts to enhance conviviality can have dramatic payoffs, not only in enhanced performance but
also in protecting the natural world while nurturing the human spirit. Though that may not be nirvana, surely it reflects a major advancement in human condition. Such ambiguity is also likely to blur the comfortable certainty of today’s financially dominated corporate decision-making. Longer time horizons and financially dominated corporate decisionmaking. Longer time horizons and broader return criteria, including nonfinancial returns, will become commonplace. Consciously engineered, highly participative ownership strategiesincluding a steady growth in insider ownership – will continue to make corporate agendas more complex. A certain element of fuzziness should be expected while the search continues for how best to strike a proper balance between those responsibilities that should reside with government and those that rightly belong to the individual, the family, the community or the enterprise.
The search is on for an ownership solution that is equiable and efficient, market responsive and consumer empowering, and an economic system in which power (both political and economic is more proximate and personal. The answer lies in a design solution. This need not mean a solution to emerge uncoaxed from the unbridled operations of current capitalism.
What’s missing is an appropriately scaled sense of personal “connectivity.” A nationstate is simply too vast and too abstract. Citizenship is a fine start, even an essential prerequisite. But that connectivity-ized fashion. The opportunities for such connections are widespread. Through doing more with less labor is the hallmark of industrial-and information-age development, it is labor that is most needed to do much of the most important work required at the community level, including restoring the environment, teaching basic skills (and values), caring for the sick and the infirm, retaining those whose skills have been made technologically obsolete-in short, creating, rejuvenating and preserving local communities and their resources. A more sustanaible balance must be struck among the diverse needs that underlie human motivation. People want to give to each other-to their spouses, their children, to others in their community. Commentators point to the dearth of great art as a sign that people can no longer afford to create. Others suggest that fragmentationof the amily is due to the fact that people cannot afford to spend more time on relationship. Still others sugest that the fragmentation of the family is due to the fact that people cannot afford to spend more time on relationships. Still others worry that those lacking a relatively secure situation in the present often a little motivated to care for their longer-term future, including the environement. The Ownership Solution is a call to the financial leaders of this financedominant era to devise ways to finance the future in such a way that a steadily broadening best of Americans can afford to participate in what has long been hailed as the uniquely “human work” of mankind: caring for others, literature, music, the arts, politics, spiritual practies, raising children and so forth. The very human need for such participation, for a sense of being in community, is a primarily thene underlying this work. Fundamentally, it is this need to which attention must be directed if national leaders hope to contribute to the restoration of civil society and the strengthening of community. Similar in tone to the ESOP notion of up-close capitalism, community-sensitive “bioregionalism” seeks to create systems in which wealth generated in a region is retained for the benefit of those who live there. Bioregionalism resists the tendency of national currencies to concentrate investment (and wealth) in urban financial centers, draining outlying areas of needed financial resources and undermining their capacity to respond to changing economic conditions.
THE POLITICS OF OWNERSHIP
Despite the many flaws of the neoclasical model (which replaced a flawed neoliberal model), American politics still seems to require a major dilemma to force political realignment. I see at least three such possibilities. The first stems from capitalism’s proven ability to push aside the old in the process of embracing the new. The second dilemma emerges in the environmental area. Third is the entitlement dilemma. These three dilemmas, in turn, suggest four key challenges-one conceptual and three that raise very practical political concerns. The first political challenge finds its roots in the fact that democracies are intended to be feedback-intensive, people-responsive systems. The second political challenge arises from the fact that policies advancing long-term change can be difficult for those who run for office on a short-term basis. Lastly, today’s leaders and wanna-be leaders must be willing to advance a yet broken manner. The Ownership Solution is not a panacea. Ownership is simply one component of the social contract that can be written either to divide or to unite. Properly engineered, ownership is simply one component of the social cohesion. The challenge lies in how best to ensure that capitalism gains in strength and robustness from an ever widening circle of independent yet self-sufficient capitalist. History offers ample proff that where societies encourage free enterprise, people become more prosperous and where they don’t, people don’t. Modern man (particularly in the more developed countries) is increasingly uprooted and cut off from traditional means for weving past and future into each day’s work. Along with a commitment to constantly update those channels of communication and persuasion through which we cope with and manage change, overcoming this uniquely modern lack of place requires continuous innovation. Today’s complex political challenge calls for a combination of both forecasting and “backcasting.” Politically, we need to envision a societal design that starts from where we want to be and then design our way back to what must be done today to get us there.potential policy initiatives meant to take us in the direction of a more fully connected populace. Nature historian and biologist, Jay Gould, document that natural
systems tend to change slowly, interspersed with periodic bursts of “punctuated equilibrium” during which dramatic change occurs before the system settles back into a more familiar state of gradual evolution. With the proper vision, committed leadership and popular support, it would be quite possible to enact a sweeping legislative scheme that could quickly put the U.S. economy (or practically any economy) on the road toward an ownership solution.
