Western Free Market Capitalist System
The new World Free Market orderists aspire to their vision of a planet ruled by economic competition and opportunism. Labour is used ad throwaways commodity to be employed when it is useful and discarded when not.
Economic competitiveness requires determining the cheapest labor markets and divesting work to them. Labour can be diverted from the United States where it is expensive in Indonesia where it is cheaper. But this leaves many American workers high and dry with salary cuts or increased likelihood of unemployment and disruption of their security lifelines into the future regarding salaries keeping up with the inflation, pensions, health care benefits and so on.
The unemployed then become a burden to the taxpayers whose taxes must escalade to allow them to continue sustaining the burden but who likewise may encounter their own labor expendability.
The source of crisis is between the owner employer and worker employee. The worker owns nothing, his labour is increasingly expendable as owners divert labour to more competitive labor markets.
Western free market capitalist system is formed around the concept of investor ownership, which is determined by the number of shares any given investor holds. The biggest shareholder takes the largest amount of the profits and the shareholder also enjoys the one share one vote prerogative.
Shares can be traded on the open market and anyone can buy them Anyone accumulating the largest number of shares also gains a transactional economic control voting majority of any given capitalist enterprise whether he or she works within it or not. The worker has no role in this process except to provide the labour.
This owner worker paradox centers on how workers are to achieve their security lifelines for their entire lives. This includes not only preparing workers for a working slot but also their overall education in general, their health care, and their post working age security.
The only stable economic structure that acknowledges the rights of the workers to perpetual security lifelines os on in which the workers become owners and of’ it legitimately share in its profits.
Otherwise as the economic theorist Kenneth Lux points out in his book “ Adam Smith’s Mistake: How a Moral Philosopher Invented Economics and Ended Morality” (1990), to have owner group ( the stockholders) determining the fate of another group ( the workers) is as to having the citizens of one country make decisions for those of another.
In capitalist nations many companies are owned by foreign stockholders and the fate of those companies workers is determined by those stockholders, who are naturally interested in profits not in the security of lifelines of the workers.
The idea that workers should own shares in the companies they work for is not new but the worker who buy the shares has only ten votes if they are voting shares, and no voting voice at all if they are only dividend shares. The shareholders who has 51 percent of all voting shares controls not only the objectives of the company but the fates of the workers as well.
Workers as Owners
During the 1950 Father Arizmendi in the town of Mondragon Spain took the question to solve how the security lifelines of workers could be systematically and perpetually guaranteed. He introduced a worker owner system in which each worker actually became an investor in his or her company. In this system a worker can become an owner in a company through contributing funds in an individual capital account (ICA). Each worker owner has a record (ICA account) with the company of his or her capital contribution to the company. All the company’s capital assets are covered by these accounts so that the worker owner ( now called members) constitute the total capital holdings of the firm.
The firm can seek outside capital but only through loans or bonds not selling shares in the company. Only those who actually work in the company can have capital accounts. Furthermore and this is the critical point voting participation in the company’s politics and direction occur on one person one vote basis reglarless of the number of shares in a member’s capital account. This is the full principle of democracy in the context of work and stands and stand in high contract to the stock ownership principle of voting which is based on the number of shares.
In the Mondragon cooperative, labor employ capital rather than vice versa. The difference here is strategic. The worker members select their own board of directors from among themselves.
In one stroke of internal economic democracy, outside control of companies vanishes and the worker’s place as an economical commodity ends.
The pyramidal paternalism of capitalism is abolished as is the indifference of wage labor system. The fraternalism of human community comes into being and wages and advances on profit are shared among all ICA holders.
The profits of such companies can be diverted into sustaining the health education and welfare of all ICA holders and their families. In Spain ICA companies have formed their own wholly owned banks, hospitals, schools and universities which provide perpetual security to all IC account holders and their families.