Ten Solutions to Transform Victorian Capitalism into Democratic Capitalism

 David M. Boje
June 17, 1998


 Introduction

There are ten solutions to Victorian capitalism. I think the solutions can help create democratic capitalism. Democratic capitalism is a labor process that is democratically governed by "We the People." We the People includes stockholders (big and small), the community in which a corporation does business, the country in which a multinational corporation has its charter, and mother earth. The rise of Victorian Capitalism has taken governance of the corporation and the labor process away from community, nation, and ecology.

First, I am opposed to multinational, Victorian capitalism, not to forms of capitalism that are caring and environmentally sustainable. Second, I think that corporations should be accountable to transnational democratic alliances. Third, multinational corporate rule needs to be dismantled so that Adam Smith's visions of smaller, more locally accountable corporations can be sustained. Fourth, Maquiladora groups of working women can be formed to bring about better working and living conditions. Fifth, there should be a community-based bill of community rights that govern the operation of corporations, such as in the example of New Mexico. Sixth, the U.S. revolution of 1776 took control over corporate charters and it is now time to revoke the notion of the corporation as a "natural person" whose executives can operate above the law of the land and the influence of the community. Seventh, read any book by Ivan Illich and you will see ways to tame the labor process model of capital accumulation by excessive use of technology, bigger is better corporations, etc. Ilich says (http://www.cogsci.ed.ac.uk/~ira/illich/texts/const_revolution/const_revolution.html):

Eighth, use deconstruction to provoke environmental and social auditing. Ninth, Mondragon Cooperatives afford full democratic participation and governance of the organization by workers. Tenth, a more limited form Is Participate Design for Participative Democracy.

These are solutions that will make corporations more democratic, less ruthless, and more accountable to global citizens and the limits of our ecosystem. Enjoy.

Solutions

  1. Solution One: Resituating capitalism. In my deconstruction of capital/labor (see syllabus examples of deconstruction), I have suggested that the relationship between capital and labor can be rebalanced. Adam Smith can be reread to recapture his focus on limiting the size of mega corporations and to doing capitalism with a sense of ethical responsibility to nations and workers.
    1. Adam Smith revisited. Adam Smith's Wealth of Nations is one of the most mis-understood documents. The entire book is available FREE on the web http://www.bibliomania.com/NonFiction/Smith/Wealth/index.html
      1. Adam Smith's pin example is in Chapter 1 of Book 1. But, this is not all there is to Smith's theory. In Chapter 8 of Book 1, Smith argues that a worker is due his/her wage:
        1. The produce of almost all other labour is liable to the like deduction of profit. In all arts and manufactures the greater part of the workmen stand in need of a master to advance them the materials of their work, and their wages and maintenance till it be completed. He shares in the produce of their labour, or in the value which it adds to the materials upon which it is bestowed; and in this share consists his profit We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer.
      1. Adam Smith advocated capitalism with ethics. For example, Smith advocated not minimum wage, but a livable wage for workers (Book 1, Chapter 8):
        1. A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation.
      1. Adam Smith argued that corporations should not be too large so as to drive out competition with others.
      2. Adam Smith did not advocate maximizing the accumulation of capital to a few. Rather, he saw that since the majority of a society is its workers, there was a need to raise the quality of life of the entire society:
        1. Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.
      1. Adam Smith favored regulations of wages that were fair to workers. He noted that owners sometimes created wage minimums that, like Nike, were below poverty standards (Book 1, Chapter 10):
        1. Particular Acts of Parliament, however, still attempt sometimes to regulate wages in particular trades and in particular places. Thus the 8th of George III prohibits under heavy penalties all master tailors in London, and five miles round it, from giving, and their workmen from accepting, more than two shillings and sevenpence halfpenny a day, except in the case of a general mourning. Whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters. When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters
  1. Second Solution: Global democracy and the transborder alliance Muto Ichiyo (1996) of Japan argues that people can form transborder alliances to resist the excessive power of gargantuan multinationals like Nike (see http://www.corpwatch.org/trac/feature/planet/gr_focus.html). 70 percent of global trade is controlled by just 500 corporations. He seeks to bring about a Global Radical Democracy.
    1. I argue that global radical democracy is the major challenge of our times. Everyone can see that power concentration has reached an unprecedented height in the late 20th century, in an unimaginably more sophisticated and penetrating manner than in the middle of the century. Global inequality has aggravated and the environment is being irreparably destroyed, but there is yet no major force to reverse the trend. A single power bloc of a new type is dictating terms of competition and survival to all peoples of the world.
    2. Generally, the global structure has become more undemocratic than in the first half of this century as nation states, in spite of their nationalistic rhetoric, have become, and been forced to become, players in this single globalisation game built around the cause of global capital accumulation.
  2. Solution 3: International Forum on Globalization's The 5 D-Model is a worldwide movement for dismantling corporate rule and seizing democratic control over our economic, social, and environmental future in the 21st century (See http://www.corpwatch.org/trac/feature/planet/gr_ifg1.html).
    1. defining corporate rule;
    2. dissecting corporate rule;
    3. denouncing corporate rule;
    4. disrupting corporate rule; and
    5. dismantling corporate rule.
    6. Related Site Taking Back the Power. David Korten's "A New Day is Coming" (See full text at http://www.context.org/ICLIB/IC40/Korten.htm).
    7. The legitimacy of the world's dominant mega-institutions - both public and private - is at a near historic low. These institutions are so big, so distant, so beholden to special interests and so costly to maintain that they are simply unable to respond in any useful way to the broader human interest -no matter who stands at their helm.
  3. Fourth Solution. Maquiladora Reform Groups. Carmen Valadez and Jaime Cota have these facts to add (See http://www.corpwatch.org/trac/feature/sweatshops/organize.html):
    1. Young women represent about 70% of a labor force estimated at 776,000.
    2. The filthiest production practices, with a clear racist intent of bringing to the southern countries the most polluting industries and production processes. Many of the chemicals and toxins used have been barred in their countries of origin.
    3. The systematic violation of labor and gender rights of maquila workers.
    4. Women and men workers continue to fight only against low salaries, mistreatment and sexual harassment, and have added an important new component: the struggle for the health and survival of the work places and the communities surrounding the maquila.
    5. Women are forced to live in neighborhoods (colonias) without basic services such as electricity, water and sewers.
    6. In Mexico, during the Fourth Workshop of Women Workers of the maquila, held in Tijuana on June 23-25, 1995, a Network of Women maquila Workers with International Links was formalized.
  4. Solution 5: Community based organizing in New Mexico State (See http://www.corpwatch.org/trac/feature/hitech/swop.html). Jeanne Gauna of the SouthWest Organizing Project seeks to make Intel Corporation accountable to the New Mexico community. SWOP has drafted a Community Environmental Bill of Rights:
    1. Right to clean industry
    2. Right to be safe from harmful chemical exposure.
    3. Right to prevention
    4. Right to know
    5. Right to participate
    6. Right to protection and enforcement
    7. Right to compensation
    8. Right to clean up
  5. Solution 6. Taking Back Corporate Charters. See http://www.ratical.com/corporations/index.html. Richard L. Grossman and Frank T. Adams argue that the revolution of 1776 sought to control the exploitative excesses of Crown Corporations like Hudson's Bay Company and the East India Trading Company. This is why the U.S. Declaration of Independence begins with "WE THE PEOPLE" "American colonists feared corporations and vowed to put them under democratic control For 100 years after the signing of the Declaration of Independence, citizen vigilance and activism forced legislators to keep corporations on a short civic leash." There were initially few corporate charters, and those granted were controlled by citizens and legislatures. There was scaled voting so large and small investors had a say in corporate governance. Corporations who engaged in abusive practices routinely had their charter revoked and were forced to disband. But, latter half of the 19th century, corporations hired legions of lawyers and some questionable judges declared that the corporate rate of return on investments (i.e., profit) was corporate property and, hence, could not be meddled with by citizens or by their elected representatives. Railroad, mining and manufacturing companies were even granted the power of eminent domain, workers (the courts also ruled) were responsible for causing their own injuries on the job, and courts ruled that laws passed as a result of widespread citizen organizing were unconstitutional. In 1886, the corporation was declared a "natural person," a citizen who was beyond the reach of the law. This movement seeks to reimpose community and legislative control by holding corporate officers accountable for their corporation's action and revoking their armor as "natural persons." Multinational corporations such as Nike, who consistently break labor and environmental laws should have their charters rescinded.
  6. Read Any Book by Ivan Illich. In Ivan Illich: Toward a History of Needs. New York: Pantheon, 1978 --- Illich speaks out about the inequities of the 1st world using up most of the world's energy for no good reason. For example, here is a list summarized from http://www.cogsci.ed.ac.uk/~ira/illich/facts/social_effects.html.
    1. The United States puts between 25 and 45 per cent of its total energy (depending upon how one calculates this) into vehicles: to make them, run them, and clear a right of way for them when they roll, when they fly, and when they park. For the sole purpose of transporting people, 250 million Americans allocate more fuel than is used by 1.3 billion Chinese and Indians for all purposes.
    2. The model American male devotes more than 1,600 hours a year to his car. He sits in it while it goes and while it stands idling.
    3. The model American puts in 1,600 hours to get 7,500 miles: less than five miles per hour. In countries deprived of a transportation industry, people manage to do the same, walking wherever they want to go, and they allocate only 3 to 8 per cent of their society's time budget to traffic instead of 28 per cent.
    4. Man, unaided by any tool, gets around quite efficiently. He carries one gram of his weight over a kilometer in ten minutes by expending 0.75 calories. Man on his feet is thermodynamically more efficient than any motorized vehicle and most animals.
    5. Man on a bicycle can go three or four times faster than the pedestrian, but uses five times less energy in the process.
    6. Bicycles are not only thermodynamically efficient, they are also cheap.
    7. Illich is making a point. More and more technology is not always more efficient, equitable, or sustainable. He seeks a convivial level of technology use. Illich argues that "Modern poverty is a by-product of a world market catering to the ideologies of an industrial middle class" (See A Consitution for Cultural Revolution at http://www.cogsci.ed.ac.uk/~ira/illich/texts/const_revolution/const_revolution.html).
      1. The bicycle also uses little space. Eighteen bikes can be parked in the place of one car, thirty of them can move along in the space devoured by a single automobile. It takes three lanes of a given size to move 40,000 people across a bridge in one hour by using automated trains, four to move them on buses, twelve to move them in their cars, and only two lanes for them to pedal across on bicycles.
      2. Bicycles let people move with greater speed without taking up significant amounts of scarce space, energy, or time. They can spend fewer hours on each mile and still travel more miles in a year.
  7. Solution Eight: Use Deconstruction to Provoke Environmental and Social Auditing. Accounts have the power to decide how the environment gets represented in income and balance sheets. ISO14000 is becoming a worldwide standard for corporate ecological accountability that is changing how assets are valued. SA7000 gives guidelines for social auditing. Deconstruction is a part of this transformation (See Accounting for the Environment in Order for it to Count by Jane Andrew and Mary A Kaidonis at http://les.man.ac.uk/cpa96/papers.htm/andrew.htm). Citing from Andrew and Kaidonis: Derrida deconstruction exposes the "textual unconscious" [Grosz,1989,109], that lies behind accounting representations. Deconstruction in accounting can challenge attempts to privilege theories, techniques and models as superior journeys to the discovery of knowledge [Derrida, 1978]. It creates spaces for the oppressed Other within the accounting system. Rubenstein [1992] claims that there is now a new class of 'stakeholders', which include people yet unborn, animals, plants and micro-organisms. Deconstruction can be used to reveal the binaries (dualities) perpetuated in status quo accounting measurement practices. Other related papers:
    1. A View From the Bottom: Deconstructing the Principal-Agent Model by Michele Chwastiak at http://les.man.ac.uk/cpa96/papers.htm/chwastia.htm. This paper uses deconstruction to argue that a paradigms ideological strength and resilience lies in its ability to rationalize, normalize, and legitimize various means of controlling the labor process in such a way that it appears as if labor benefits from its own degradation and exploitation.
    2. Social and Environmental Accounting: A Review of the Non-Role for Accounting by Glen Lehman at http://les.man.ac.uk/cpa96/papers.htm/lehman.htm. Lehman's viewpoint is that accounting reports obfuscate the distortions between what is reported and the actual value relations underlying those numbers (reification). "Accounting is a compliant participant in the exploitative process of capitalism." What is need is to deconstuct who accumulation and possession are driving forces. Habermas' model provides some guidance through a language model based on an ideal-speech situation where normative and moral issues are discussed.
    3. Accounting for the Environment by Mehenna Yakhouhttp http://les.man.ac.uk/cpa96/papers.htm/yakhou.htm. This paper looks at environmental and social accounting practices, particularly at life cycle models.
    4. For a good example of story deconstruction, see STORYTELLING AND ETHICS IN FINANCIAL
    5. ECONOMICS by Sara Ann Reiter at http://les.man.ac.uk/cpa96/abstract/reiter.htm
  8. Solution 9: Mondragon Cooperatives. Mondragon is a postmodern organization that operates according to democratic principles of participation and ecology. (see http://www.sfworlds.com/linkworld/mondragon.html). The producers own the capital. "The Mondragon Corporacion Cooperativa (MCC) began in the town of Mondragon in 1956 when a group of five young engineers were encouraged by their socialist priest, Father Jose Maria." "MCC has grown in its forty years of operation to include 160 employee-owned cooperatives, involving 23,000 member owners, with sales grossing US$3 billion in 1991." Profits from this cooperative are recycled to the local community. "Statistics show the Mondragon cooperatives to be twice as profitable as the average corporation in Spain with employee productivity surpassing any other Spanish organisation." "Management is responsible and accountable to members, that is in producer co-ops to directors elected by and from worker-owners." (See http://www.solbaram.org/articles/mondra.html). "Each member's capital account is credited each year with his share of the co-op's profits, but may also be debited with his share of any losses."
  9. Solution 10: Participative Design for Participative Democracy. See http://www.nmsu.edu/~iirm/articles/democ.html and http://www.nmsu.edu/~iirm/articles/hewpack.html for an overview. Whereas, Mondragon invites workers to participate in the division of profits and ownership, the participative democracy movement limits democracy to how the work gets done. Fred and Merilyn Emery are leaders in the Participative Democracy movement. PDPD is based upon the democratic design principle...Coordination and control of work tasks is done by those doing the work. Their search conference approach attempts to transform organizations from DP1 to DP2 (http://www2.wi.net/~rpurser/contents.htm). DP1 is design principle one. DP1 organizations do not allow workers to participate in decisions that control their own work. DP2 organizations allow workers to participate in how the work gets organized and conducted.
References for Ivan Illich Solutions
AUTHOR: Illich, Ivan 1926-
Lister, Ian
TITLE: After deschooling, what?
IMPRINT: London 14 Talacre Rd, NW5 3PE : Writers and Readers Publishing Cooperative, 1976
NOTES: Originally published in a different physical format:After deschooling, what? / Ivan Illich. London : Writers and Readers Publishing Cooperative , 1974.
SUBJECT: Educational sociology Education

AUTHOR: Illich, Ivan 1926-
TITLE: Celebration of awareness : a call for institutional revolution
IMPRINT: Harmondsworth : Penguin Education, 1976
SERIES: Penguin education specials Pelican books
NOTES: Originally published: Garden City [N.Y.]: Doubleday, 1970; London: Calder and Boyars, 1971
SUBJECT: Social change

AUTHOR: Illich, Ivan 1926-
TITLE: Deschooling society
IMPRINT: Harmondsworth : Penguin, 1976
SERIES: Pelican books
SUBJECT: Educational sociology Education

AUTHOR: Illich, Ivan 1926-
TITLE: Disabling professions
IMPRINT: London : Boyars, 1977
SERIES: Ideas in progress
SUBJECT: Professions -- Social aspects

AUTHOR: Illich, Ivan 1926-
TITLE: Energy and equity
IMPRINT: London : Calder & Boyars, 1974
SERIES: Ideas in progress
Open Forum
SUBJECT: Transportation -- Social aspects
Transportation -- Cost of operation
Energy policy
Social history -- 1970-
Transportation -- Passenger traffic

AUTHOR: Illich, Ivan 1926-
Verne, Etienne
TITLE: Imprisoned in the global classroom / Ivan Illich and Etienne Verne
IMPRINT: London : Writers and Readers Publishing Cooperative, 1976
CONTENTS: Includes 'Political inversion' by Ivan Illich
SUBJECT: Education -- 1965-
Education -- Aims and objectives
Educational sociology

AUTHOR: Illich, Ivan 1926-
TITLE: In the vineyard of the text : a commentary to Hugh's Didascalicon
IMPRINT: Chicago : London, : University of Chicago Press, c1993
SUBJECT: Hugh, St. Victor. Didascalicon Learning and scholarship --
History -- Medieval, 500-1500
Manuscripts, Medieval -- History

AUTHOR: Illich, Ivan 1926-
TITLE: Limits to medicine: medical nemesis: the expropriation of health
IMPRINT: Harmondsworth New York : Penguin, 1977
SERIES: Pelican books
NOTES: Definitive version of the author's paper: Medical nemesis - the expropriation of health, published in 1975
SUBJECT: Social medicine
Medicine -- Philosophy
Medical care
Iatrogenic diseases
Delivery of health care
Ethics, Medical
Iatrogenic disease
Philosophy, Medical
Politics
Quality of health care
Social medicine

AUTHOR: Illich, Ivan 1926-
TITLE: Shadow work
IMPRINT: Boston, Mass. London : Boyars, 1981
SERIES: Open forum
NOTES: Bibliography: p118-152
SUBJECT: Economics

AUTHOR: Illich, Ivan 1926-
TITLE: Tools for conviviality
IMPRINT: [Glasgow] : Fontana/Collins, 1975
NOTES: Previously published: London : Calder and Boyars, 1973
SUBJECT: Economic development -- Social aspects
Industry -- Social aspects

AUTHOR: Illich, Ivan 1926-
TITLE: Toward a history of needs
EDITION: 1st ed
IMPRINT: New York : Pantheon Books, c1978
CONTENTS: Contents: Useful unemployment and its professional enemies.--Outwitting developed nations.--In lieu of education.--Tantalizing needs.--Energy and equity
SUBJECT: Social history -- 20th century
Social problems
Economic development -- Social aspects

AUTHOR: Pattanayak, Debi Prasanna 1931- Illich, Ivan 1926-
TITLE: Multilingualism and mother-tongue education
IMPRINT: Delhi New York : Oxford University Press, 1981
SUBJECT: Native language and education -- India India -- Languages
India -- Scheduled tribes