Progressive economics

[Edward theurj Berge]

I referenced this site, Kick if Over, in my last post in the Rifkin thread. Like Rifkin it's a different way of looking at economics and a way that might well be considered an advance in developmental terms. Here's the introductory blurb. There are quite a few articles and lots of references, links. etc. And certainly food for thought and discussion here.

"Adbusters invites economics students around the world – especially PhD students – to join the fight to revamp Econ 101 curriculums and challenge the endemic myopia of their tenured neoclassical profs. Read some of the introductory articles, check out the latest dispatches on our blog, then download the Kick it Over Manifesto (and other posters) and keep pinning them up in the corridors of your department. Get a small group together and start jamming! Put your university at the forefront of the monumental mindshift now underway in the 'science' of economics."

[Edward theurj Berge]

And from Arnsperger earlier in this thread:

"The brilliant and diabolical logic of capitalism plays on the confusion between 'needs' and 'cravings.' That's why we run after consumption and accumulation. Consequently, it's a system that creates repetitive compulsions for most of us - in any case, for those who have the means to treat themselves to certain things - and that simultaneously creates structural inequalities.

"One cannot do without the economy, but one can and one will have to do without capitalism. This existential crisis of the economy is a truly essential crisis of capitalism, the symptom of a profound malaise.

"I propose the implementation of three kinds of ethos. First, an ethics of willful simplicity, a return towards a much more frugal conviviality ... The second ethos: a radical democratization of our institutions, including our economic institutions, proceeding to the democratization of companies ... And third: an ethos of profound equalitarianism, going so far as 'a universal allocation,' that is, an unconditional base income paid to all citizens.

"The general idea is that we must recreate a critical conviviality. Each person must personally conquer his autonomy; each person must do the work of de-conditioning himself; perform a self-critique of his own complicity with the system. That occurs through an anchoring in the locality and in power-sharing, in an ethos that I call neither communist nor communitarian, but rather a 'communalist' ethos that leads to willful simplicity and radical democratization that result in a relocalization of the economy."

[Edward theurj Berge]

What is democratic socialism? To clear up conservative misconceptions of what the term socialist means, the following is from the Democratic Socialists of America FAQ. Note the key adjective democratic, a concept grossly lacking in conservative policies. They oppose State-run social planning like Russia or Eastern Europe; instead they favor democratically owned and operated businesses within a market-based economy. This will not replace private business but it will strengthen public regulations and tax structures to hold them accountable. They list as examples of democratic socialist policies those of western Europe and Scandinavia, the latter of which leads the way in the world happiness index. In the US the political faction most aligned with their agenda is the Congressional Progressive Caucus, who authored the Budget for All (compare with the moral issues of Ryan's budget). And most importantly, they insist on wearing the term socialist as a badge of honor instead of running from the conservative framing. We must learn to frame this correctly based on the humane and people-centered morality that motivates its policies. And be proud to wear the term once correctly defined. See the DSA FAQ linked above for more.

[Edward theurj Berge]

Jim Garrison on Whole Foods:

"Over the past several weeks, I have heard John Mackey promote his book Conscious Capitalism and have come to the conclusion that it might have been more appropriately titled Unconscious Capitalism. I say this because in his various interviews, he managed to re-iterate a position he has taken previously, that Obamacare is somehow a form of 'fascism,' and that climate change is not of real concern and might actually be good in some places."

"It has been on a mission to establish a national chain of organic food 'supermarkets.' It has accomplished this goal with a policy of buying out or forcing out its competition. Its employees are treated pretty much the same as Wal-Mart -- starting them close to minimum wage, being stingy about benefits, and fighting any attempt to have the workers unionize. Worker turnover is very high. Unlike Walmart, which has ruthlessly cut prices and forced its vendors to cut profits to razor-thin margins, Whole Foods has taken the opposite strategy -- wiping out competition and then charging as much as it can."

"But we are not fooled. We know the use of 'conscious capitalism' by the founder of Whole Foods is very much like the eco-friendly ads we see by Chevron or BP. It is image management, little else."

"The basic problem for someone like John Mackey is that he has not been conscious enough to actually challenge the basic assumptions of the economic model by which he built his company. He may be selling organic food but he is a classic capitalist. He has built Whole Foods on the notion of what George Soros calls 'free market fundamentalism.' This is the classic economic doctrine that unfettered competition, regulated as little as possible by government regulation and which seeks primarily to maximize the return to the shareholders, is what real capitalism is and should remain. This approach characterizes Whole Foods along with the rest of the American corporate sector, indeed most of the entire global economy. Basically, Whole Foods represents business as usual with slightly enhanced environmental standards."

"Capitalism is exploitative by choice, not by design. Another choice is what I would call abundance capitalism. This is the choice our company is taking as one of the new benefit corporations spreading across the country. It is a choice to use as our measure the triple bottom line of planet, people, and profit as a genuine commitment to optimize returns to all our stakeholders and to our world, not just our investors. It is a choice to operate by the principle of collaborative abundance rather than free market fundamentalism. It is a choice that seeks to share the wealth, not concentrate the wealth. It is a choice not only not to exploit the environment but to enhance the environment. It is a choice to be generative, not competitive, a choice, ultimately, that it is not enough to let the market decide. What is now required, especially in a world under duress such as ours, is to turn free market fundamentalism on its head and set forth a new more abundant principle -- in deciding, the market must give primacy to the mutual generativity of the whole."

[Edward theurj Berge]

From a review of Conscious Capitalism:

"This over-the-top adulation of the private sector, which pervades the book, might be tolerated by readers seeking the secrets of his company's success.... But those looking for rigorous analysis and informed inspiration will be disappointed....the book falls prey to the same fatal flaw of other business books and CEO treatises: namely, promotion of an oversimplified framework that ignores the complexities of the real world."

"Mackey provoked an SEC investigation in 2007 by posting comments about Wild Oats (which Whole Foods was taking over) on a Yahoo! Finance board under an alias that was an anagram of his wife's name; and inspired protests after criticizing President Obama's healthcare proposals in a Wall Street Journal op-ed. More recently, he was forced to retract his use of the word 'facism' on NPR to describe the new healthcare law."

"Describing the SEC investigation is one of a few spots in Conscious Capitalism where Mackey ignores his own advice, and drops the studied prose of the rest of the book to indulge in a bit of a rant: 'The whole thing was so bizarre to me, because I was just having fun when I did those postings. I didn't see how anyone was being harmed, and in fact no one was. Yet, it was made into a huge deal.' Failing to see why it might be problematic for a CEO to make anonymous statements that could depress the stock price of a takeover target undermines the book's central exhortation, for business leaders to understand the perspectives of others."

"The starting premise of Conscious Capitalism will be enough to turn off many: that business is 'fundamentally good and ethical.' It is true that economic development has lifted millions out of poverty. But business has also harmed individuals and communities around the world, as demonstrated by mining accidents from West Virginia to Africa, labor abuses in factories from China to New York, and the global financial crisis."

"To support his argument, Mackey shares his view that 'business isn't based on exploitation or coercion at all. People trade voluntarily for mutual gain. No one is forced to trade with a business.' That may be true for Whole Foods shoppers, but it is not true for the world's most vulnerable people. Communities living on top of oil, gas, copper or gold have no choice but to 'trade' with companies developing those resources. Garment workers in Bangladesh and artisanal miners in the Congo might have chosen to do what they do, but they're hardly swimming in viable alternatives, and are certainly not among the 'vast majority of people' for whom capitalism has enabled 'more vibrant and fulfilling lives.' Those are the people who Conscious Capitalism should be aimed at helping. But since we are a long way from universal enlightenment, government exists to provide protection and a balance of power -- not just to overreach with restrictive regulations and inspire 'crony capitalism,' as the authors seems to believe."

"The book suggests following the lead of a few companies that the authors admire, including Google and Apple. Aside from the fact that few who have interacted with either company would call them 'transparent and trustworthy,' both companies' troubles in China alone illustrate the pitfalls in taking a company's stated mission and elegant offering on face value. Again, the authors undermine the very holistic approach that they advocate."

[Edward theurj Berge]

And from this article:

"But something sinister lurks beneath the surface of Whole Foods' progressive image. Somehow, Mackey has managed to achieve multimillionaire status while his employees' hourly wages have remained in the $8 to $13 range for two decades. With an annual turnover rate of 25 percent, the vast majority of workers last no more than four years and thus rarely manage to achieve anything approaching seniority and the higher wages that would accompany it. If Whole Foods' workers are younger than the competitions, that is the intention."

"Indeed, Mackey is no progressive, but rather a self-described libertarian in the tradition of the Cato Institute. He combines this with a strong dose of paternalism toward the company's employees."

"Using a carrot and very large stick, Mackey managed to 'convince' Whole Foods workers across the country to vote in 2004 to dramatically downgrade their own health care benefits by switching to a so-called consumer-driven health plan – corporate double-speak for the high-deductible/low-coverage savings account plans preferred by profit-driven enterprises."

"Preventing Whole Foods workers from unionizing has always been at the top of Mackey's agenda, and the company has been successful thus far at crushing every attempt. Perhaps the company's most notorious attack on workers' right to unionize occurred in Madison, Wis., in 2002. Even after a majority of workers voted for the union, Whole Foods spent the next year canceling and stalling negotiation sessions -- knowing that after a year, they could legally engineer a vote to decertify the union. Mission accomplished."

"At the mere mention of the word "union," Whole Foods turns ferocious. Even when United Farm Workers activists turned up outside a Whole Foods store in Austin, Texas, where Mackey is based, the company called the police and had them arrested for the 'crime' of passing out informational literature on their current grape boycott."

"Whole Foods' nationwide campaign required workers to attend 'union awareness training' complete with Power Point presentations. At the meetings, store leaders asserted, "Unions are deceptive, money-hungry organizations who will say and do almost anything to 'infiltrate' and coerce employees into joining their ranks," according to Whole Foods workers who attended one such meeting."

"When rumors recently began circulating that a union drive might be brewing in San Francisco, the response from the company was immediate -- including mandatory "morale meetings" to dissuade employees."

"Whole Foods now stands as the second-largest anti-union retailer in the U.S., behind Wal-Mart. Most of Whole Foods' loyal clientele certainly would -- and should -- shudder at the comparison."

[Balder]

Interesting; I'd heard some of these criticisms before, but perhaps not so forcefully made.  Mackey, of course, is one of the current big backers of the Institute for Cultural Evolution (ICE).  That may have a chilling effect ...

[Edward theurj Berge]

Compare and contrast from my blog post Forbes on Walmart v. Costco:

Yes, Forbes, not some liberal media outlet, has this to say about why Costco is doing so much better than Walmart. Costco's sales growth is 8% compared to Wallmart's 1.2%. Why?

"Here’s a crazy thought—might it have something to do with the fact that Costco pays nearly all of its employees a decent living (well in excess of the minimum wage) while Wal-Mart continues to pay its workers as if their employees don’t actually need to eat more than once a week, live in an enclosed space and, on occasion, take their kids to see a doctor?"

So how does Walmart respond? By cutting its employment roster by another 1.4%. And the service there sucks too. Why? The wages are so low that workers aren't motivated to give a shit about the company. Meanwhile Costco's employees get paid a living wage and their stores are far more efficient with better rated service. 

[Edward theurj Berge]

Mackey has commented that Obamacare is "like fascism." In this article Mackey clarifies the kind of healthcare he wants, but that is a perfect description of Obamacare! The article does note though that Whole Foods health insurance is one of the better plans, but again it's like Obamacare! A good example of speaking through one's ideology without having a grasp of the facts, because ideology won't stand for facts.

[DavidM58]

Looking at this thread for the first time, and I want to give a hearty *yes* to this comment from Feb. 2011:

theurj said:

One of the themes in a progressive economics is that unending progress and growth is unsustainable in an environment of finite resources...

This might also be where the theory doesn't meet the practice. The theory is well aware that integration must come before a new level can be approached. It seems the pluralistic stage has not adequately been integrated in TM integral, as if in a hurry to get higher and farther and better we took on more than we were ready to chew. As a result we retained the formal rational adherence to the myth of eternal progress, which seems the clue that our integration of pluralism is not yet complete...