Marjorie Kelly: Ownership Revolution: Transitioning from Extractive to Generative Economics

Broadcast 6/15/2015 at 12:23 PM EDT (56 Listens, 57 Downloads, 1889 Itunes)
The Rob Kall Bottom Up Radio Show Podcast

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Marjorie Kelly is Executive Vice President with The Democracy Collaborative. She's the author of Owning Our Future: The Emerging Ownership Revolution, published by Berrett-Koehler, won a Nautilus Book Award. Kelly previously was a Fellow at Tellus Institute, and cofounder/President of Business Ethics magazine. For five years she was a lead consultant on the Ford Foundation's WealthWorks initiative.

These are rough notes, far from a transcript. Please listen to the interview.

Rob: what do you care about most in making this world a better place.

It's the institutional architecture that's creating all the problems in t his economy. We have an economy designed to serve the few and we need one that serves the many. It goes to the basic the structure of the economy.

Rob: You say that you can't tackle the operating the operating system at the heart of major corporations. If we try that way we'll fail. That reminds me of the quote:

"You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." -R. Buckminster Fuller

Rob: What are some of the most important ideas that you want the listeners to understand.

Start with this question of building a new economic system. You can't start by asking, "is this possible. You start by saying "this is necessary."

The profit maximizing apparatus is the problem.

When I wrote my book, Owning our future, I travelled around the country looking for companies that were already working.

Rob: explain what extractive and generative economics are

We have a system designed to extract wealth from the planet and biosphere. Financial extraction is really the central aim of our economic system. And that's the problem.

You can make modification" but it is dismantling and flattening all the protections we built since the 30's. So you have to build a system with a different logic at it's heart-- the generative economy-- one designed to create conditions for life. We need an economy that is designed to keep us alive, healthy and to serve all of us. It already exists in a small scale.

You can go and look at worker owned cooperatives-- they have a goal of serving employees" for example Cooperative Health Care associates -- the largest worker owned cooperative in the company-- mostly owned by people of color and Latinas. The company is designed to serve the customers and employees well.

Organic Valley in WI is owned by farmers and its mission is to save the family farm. It's a national marketing company for all of their products-- and they receive buyout offers every year.

Rob: another important aspect of your book is that company's primary mission is to serve shareholders.

CEOs serve at the pleasure of shareholders. They have to increase earnings every year.

Rob: you write about how perpetual growth is built into the DNA or operating system of extractive economics.

Companies have to grow quarter after quarter , y ear after year or their stock prices collapse.

Rob: Tell us more about the generative economy and how it is manifesting.

FOr the last two years I have been at the Democracy Cooperative, with offices in DC and Cleveland. We were invited to help the Cleveland foundation create the Everygreen cooperative-- which is supported by local institutions.

Rob: Let's first talk about the Emerging Ownership Revolution

ownership has a design. It's a social construct. We can design it in different ways. Ownership is the foundation of every economy. Go back to monarchy-- and they owned the land and so they controlled society. The founding of america was a struggle over who controlled the land. Look at the industrial age-- the Robber Barons created great wealth owning railroads"

We're now in the age of finance. It's always a story of who controls the wealth. Communism is about state control. Capitalism is about private and elite control.

It's all about who owns" when you see that's the name. We need to take over companies.

Rob: So you're talking about government taking over companies?

there's tremendous churn in economies, with turnover often every 15 years.

Rob: Like Joseph Schumpeter's creative destruction.

Rob: So tell us a little bit about what an ownership transition might look like.

Let me tell you about an example. We think of it as an employee ownership transition. A lot of baby boomers companies will be transferring ownership-- you could sell to multinationals, you can close the companies down. What if you sold them to employees as an exit strategy for company founders. if you do you can get a tax break of 35% for capital gains. Why can't we put in effect a mechanism to make this happen over the next 30 years.

Rob: you wrote that ownership was built into the Magna Carta. Can you talk about this.

The magna carta was really about the barons saying to the king, "we don't hold the land at your pleasure. We hold it absolutely." It used to be that the kind could take it away. It was about property at the root of the Magna Carta.

Rob: So a document that think of as important to freedom was one tied to what h as now become a part of our problems.

I say in the Divine Right of Capital that we've never democratized economics.

Rob: You say in your book, --the democratic ideals of liberty, justice and equality remain our ideals. Where are the corollary ideals, in the world economy?" Economics does not include democracy.

fairness should be a part of " new economics.

Rob; Monkeys and elements understand it.

Rob: Let's talk about what you're doing in Cleveland.

It took me times to see that ownership of assets and financial wealth is really the key element here. Then I started looking at other options" there's so much work being done in these areas, but too often below the radar. When I joined the Democracy Collaborative I began to see that you can develop social systems of support. And there's a prototype of that in Cleveland-- the Evergreen-- three employee owned companies and they work together-- solar installations, laundry and greenhouses

They are supported by purchasing by what we call large non-profit "anchor" institutions.

Cleveland's a poor city. We asked, who's not leaving. We saw that hospitals were buying over $3 billion annually mostly not locally. So we researched and identified".

There's a central holding company that helps support and finance them and there's a foundation that's helped start them, and a financial end that brings investors.

IT's about recognizing that we can create support systems.

Rob: I've been writing about the need to think smaller, about debillionairizing the planet. You've talked about restricting certain areas from extractive economics, like education and healthcare, as you've said.

How do we change from the cultural accept, even worship of billionaires. When it's no longer cool to be a billionaire"

Rob: I've written about how in indigenous cultures there are no billionaires, someone who tried to accumulate more than all the tribe combined would be considered insane and cast out.

people who have or seek great wealth are not that happy-- not great social relations, they tend to drink too much.

Rob You've said:

Rob: reading Fritjof Capra's book, THE SYSTEM's VIEW OF LIFE got me very aware of how we are part of systems.

Rob: Now you talk about the systems model and emergence in your book.

I really love systems thinking and encourage listeners to check it out What's wonderful about systems thinking, transformation is a routine part of life. Systems thinking came out of physics, when physicists discovered that the subatomic world didn't function with Newtonian rules-- there were flows of energy that were all connected. They had to rebuild their world view to make sense of quantum reality and systems theory came out of that. One of the principles of systems thinking is emergence. Margaret Wheatley talks about how we don't need to go out and change the world. We need to connect with like-minded people" when people do that you begging to form networks and networks learn from that and become communities of practice and some point a new system emerges at greater scale. Emergence is not something that's controlled by anyone. It's a lovely concept

Rob: I love the hope that emergence offers, that in spite of the challenges we face that seem so daunting, things could change really fast.

Fritjof says that things could flip over really quickly. Transformation happens suddenly in living systems. They reach a point of perturbation and then re-form themselves. There can be a breakdown and then a breakthrough of social order.

One interesting example I write about in my book is Mt. St. Helen, in Wash state, is a volcano. My sister is a field stream scientist. The explosion leveled trees" people wondered how things would come back. They found it happened much faster than they expected. Some

Rob: It seems to me that psychopaths, sociopaths and narcissistic behavior is a part of extractive economics

IT certainly normalizes selfishness. CEOs feel that they have to lay people off and send jobs overseas.

Rob: So how does that change with your vision of the generative economy.

Buddhist psychology say that we all have these seeds within us-- seeds of narcissism, seeds of compassion and the question is what are we feeding?

Rob: you write in your book about shifting from a mindset of Regulations vs a dream of normal functioning

Rob: You've talked about regulations vs norm

I like to talk about regulation versus design. Engineers talk about the weakest form-- is to warn, if you don't want people to go up on railroad tracks. Or you can put a cross bar, or flashing lights, like regulation. The best way to prevent accidents is to design them out of the system, with over or underpasses, so you've designed the problem out of the system.

Equal Exchange, in the boston area, sells chocolate and coffee and it's an employee owed, fair trade company. it's bylaws have a rule that if this company is ever sold the profits will be given to a non-profits.

Rob: I've thought along these lines for keeping people from becoming billionaires. How do you respond to libertarians, Ayn Rand Objectivists, who say that this is stealing

It's okay to make some wealth. I support entrepreneurs having some wealth. But there need to be limits, I think at the end of your life. Give your children some, but give most of the wealth away in terms of building a new kind of system. Maybe you need inheritance taxes, but I think there are ways to accomplish it too.

You have to pay attention to the cultural norms. You have to make it cool to give away your money..

The LEEDS standards-- silver, gold, platinum levels meeting standards. Then NYC came along and made it a requirement .

Rob: it's like, you put the meme out there and people will start embracing it.

Rob: We need to wrap.

democracycollaborative.org

Marjoriekelly. com

"the democratic ideals of liberty, justice and equality remain our ideals. Where are the corollary ideals, in the world economy?

Not in the interview, but great quotes by Kelly:

"Perhaps the measure of our lives is not how much we accumulate for ourselves but how much we feel alive and enliven those around us. Maybe the measure of our success is not how extractive we are but how generative."

"The Ownership revolution begins in the human heart."

"We become enlivened when our hearts are touched by something real, something we long for, collectively-- something we naturally value in our heart of hearts."

"The shifting ground of legitimacy" shifted from monarchy, from slavery, from racism and sexism" Can we imagine the ground of social legitimacy shifting beneath the capitalist value system that sees financial capital as the goal above goals, the pinnacle? Can we imagine people saying, "enough financial wealth-- I choose life.?"

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