The Politics of Inclusive Capitalism (2)

Excerpted from Chris Mackin:

“Inclusive capitalism may not sell well with professors and pundits, but it appears to have some genuine appeal at the grass roots with “Main Street” business owners and across a surprisingly wide spectrum of political opinion. There are actually indications that these ideas can unite or at minimum enforce a practical truce among ideologically disparate people.

Case in point: The federal government’s two strongest champions of broad-based employee ownership through ESOPs also happen to be ideological outliers in Congress. Rep. Dana Rohrabacher, R-Calif., believes in ESOPs to encourage broad-based property ownership in the private sector that, if successful, promotes conservative values by lessening dependence upon government. He has drafted his own far reaching legislation that would give preferences for broad based employee ownership companies in areas such as government procurement. In the other corner, Sen. Bernie Sanders, I-Vt., a self-described democratic socialist, looks at ESOPs and cooperatives and sees economic inclusion and justice. He’s familiar with examples in his home state, including an ESOP company of roughly 200 employees, King Arthur Flour, whose roots predate the Revolutionary War.

At a reception of ESOP companies not long ago, I mentioned this seemingly strange ideological commonality, namely the enthusiasm of Sen. Sanders, to its conservative champion, Rep. Rohrabacher. His reply to me… a short, stunned pause followed by a gradual smile. “Bernie served with me in the House before moving on to the Senate… we have our differences, but we also agreed on a lot of things. I think he is a patriot. So am I. So we agree on this issue. That’s great!”

The Rohrbacher-Sanders story suggests that the idea of inclusive capitalism enjoys a kind of ideological ambidextrousness that is promising. If enthusiasts of both the right and the left can refrain from insisting that participants enter the world of these ideas through their particular ideological doors, even more progress can be made.

Writing about the overall importance of ideas in the conclusion to his “General Theory,” John Maynard Keynes famously claimed that “after a certain interval” the scribbling of economists and political philosophers is more powerful than is commonly understood. If an interval of a century and a half — 165 years to be precise — fits this definition, we may hope that the thoughts of one of Keynes’ more prominent predecessors are now ready for fresh inspection. John Stuart Mill is widely considered one of the founders of the field of economics. In his 1848 book “Principles of Economics,” Mill cast a wary eye toward the newly entrenched ownership structures of industrial capitalism he was then observing.

He predicted a different future:

“The form of association, however, which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves.”

Over the past decade, ample evidence has been collected to demonstrate that inclusive structures of capitalism at the workplace are fully competitive with more exclusive models. It appears that no concessions need be made at the altar of efficiency when structuring a more fair economy. This kind of evidence is useful on its own but perhaps its most important virtue is how it can affect the overall policy conversation. Because Americans still need to pay the bills, a focus on income related interventions and paychecks will remain important. However, if we are to bridge the economic divides that trouble us today, we also need to break out into new territory. We need to break down the exclusive club that capitalism has become. We need to share the machinery of capitalism.”

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