introduces a new way to run our economy in the wake of what he calls the failure of both corporate capitalism and state socialism. regards conversations with great minds i'm joined by professor gar helper of its professor is a historian political economist activist and author he's currently the lionel r. ballman professor of political economy at the university of maryland and a former guest scholar at the brookings institution the other of several critically acclaimed books on the atomic bomb and atomic diplomacy as articles appeared in leading american public ations including the new york times washington post the l.a. times the nation magazine and the atlantic and he's frequently featured guest on major cable news programs after completing his ph d. from cambridge university professor alfred's served as

a legislative director in both houses of congress and as a special assistant in the state department he's also the president of the national center for economic and security alternatives and is a founding principle of the democracy collaborative a research institute in institution excuse me focused on initiatives that promote the democratization of wealth and most recently he's the author of america beyond capitalism a book that has been described as one of the most important books of the decade it's my pleasure to welcome our helper of it's good to be here thought of you're with us to conversations great minds. america beyond capitalism we're talking about systemic changes how do you what is the system and how does a good change grow there's a you know basically in history systems are defined by who owns the capital who owns the wealth feudalism the tiny elite held the land in the capital in ordinary capitalism it was small business only in the capital and defined. in the

competitive capitalist system state socialism or communism was the state owning the wealth and we've got basically corporate dominated capitalism a system that's not very democratic because you know we live in washington here the lobbyists are up there swarming and big money is there but it's a form of capitalism that is increasingly understood i think both on left and right as it's not very democratic so if you're change the system somebody's got to own that wealth not all of the institutions but the top one percent now has just about half of the investment capital think about that one percent of a society owning just about half of all the investment capital that's literally medieval and i don't mean that rhetorical i was going to in fact that that's where you know my mind was going was like what you're describing is basically a feudal state it's basically kingdoms these these these large corporations are functionally kingdoms with kings and lords and and serfs and and they have

no loyalty to individual nation states not at all and not only that they will escape the nation when they want to leaving behind the factories i've been out to detroit recently i know if you've seen it it's a wasteland they've just left that. cleveland ohio or st louis and secondly you know i've worked on the hill both sides and the lobbying power the amount of money that's up there are moving legislation and we've just passed this legislation to regulate banks and there are two thousand lobbyists up there really rigging the rules and finding loopholes and dodd frank getting what they're having and it's still only what twenty percent implemented or something like that's right because i hardly are there but it's what is interesting is that you take the wall street occupy wall street they're upset about the one percent owning so much but they're also upset about the democracy aspect it's both economic power and economic pain but also democratization and their general assembly they're trying to project the.

a different vision of democracy and it is a vision but i think it reflects that what many people understand that something's wrong in washington something's wrong with this and and that's what's really interesting about this time when more and more people left and right have a sense you know the truly something fundamentally wrong in the country and that's when you know you're beginning to talk about a systemic problem not just who wins the next election but really what's wrong at the heart of the system the economic power base where there was there was i think this sense all around the world and in the nineteenth century and in the eighteenth sixty's karl marx identified the problem i think fairly well actually. his solution . you could argue didn't work out but. that there was a lot of social upheaval that came around that and then you could argue also that in the one nine hundred thirty s. my late twenty's or early one nine hundred thirty s. here in the united states and around much of the rest of the world the great depression there was a rather crisis of the system and yet it seems like the system always adores it

always reinvents us and always you know this kind of neo feudalism always comes back how do we break that cycle and what's what's at the core of that system and what's the alternative to where there are two questions there are really three the wonderful questions at what drove me to write america beyond capitalism i think that something at this point in history and i don't say this lightly i think this is the most interesting and maybe most important period of our history and for the following reasons obviously oversimplified the economy was decaying in the first quarter of the twentieth century up and down crisis and world war one smale doubt the economy the economy began to decay in the twenty's and then collapsed and world war two solve the problem and then the korean war the cold war the vietnam war in the third quarter of the century and now you know military expenditures are high absolutely but they're declining to the four percent range they're not sustaining the economy and global pressures are undercutting us so we're really. against how

do you manage the economy the war the war in iraq and a war economy for a century i think that's right and that's an oversimplification i wouldn't run but even back to after the civil war reconstruction was usually profitable absolutely and main and kept the system stabilized so i don't think we're in for a big crisis of the economy was the government was about eleven percent of the economy nine hundred twenty nine and it's now about thirty percent roughly so i don't think we're going to have a total collapse but stagnation and decay and pain and that's when people begin to think is there a way to rebuild that to try something new over the long haul trying to change the system but it is more of an evolutionary way than the traditional kind of classic crisis case so it's a very interesting period i don't see anything on the horizon that's going to easily bail us out of the stagnation pattern would go up and maybe have a ripple but the pain levels i think are going to continue and that forces people to think and i think to act differently and hopefully to change you know the

governments both but thirty percent of our economy and yet if you look at the economies of of canada it's about fifty percent fifty three percent i believe denmark it's almost sixty percent most of the european countries are in the fifty or sixty percent range and you could argue that if we simply took into what they consider the commons things that should be the commons arguably the health care system and the higher education system and maybe a few other. pieces around the edge but those at the core our government would become maybe forty percent of the economy and the thus the fluctuations in the economy produce produced by changes in consumer spending would be less wouldn't that stabilizer i mean yes it's you know take almost any keynesian economy paul krugman being the most obvious which say just what you've said increase the expenditures invest more you will get more tax receipts later on to pay for this and you can run deficits and you could have a highly performing week. i mean the problem is politically i'm from

a nationalizing the commons you are talking about that and and indeed that way would work but i think the politics of that i think is over the koch brothers won't have anything to do with not only the koch brothers they want to play but one of the things and again working in the house and senate. that policy that set of policies really depended upon a liberal progressive coalition and that depended upon a strong labor movement and labor movement is gone from about thirty four percent of the labor force being organized it's now at eleven percent and about six percent the private sector and declining so the base of power for that way of solving the problem sadly i think is over so there's either another way forward over the long haul or i think we're in for a real trouble in decay and decay is what we're seeing right so what's that way forward well if systems are organized around who owns the capital if that's where the power is and if you don't like state socialism and you don't like corporate capitalism obviously democratizing capital in some way is the critical idea

behind it and it's in fact if you think about it there's a lot of that in america just below the surface and the press doesn't cover it but one hundred forty million americans are members of co-ops and credit unions that's that's that's almost the size of the american workforce that's it forty percent of and forty percent of the society so people are they know something personally about a democratized part of the economy and it's not very fancy at that but it is one person one vote or a for instance there are now something like fourteen thousand fourteen thousand worker own companies but i think the last number was eleven thousand plus some others and about thirteen million people involved in worker own companies so that's another way to democratize who owns the wealth are a lot of those though just kind of the old fashioned. by old fashion and these are still recent last thirty years or so but in place stock option plans where the employees own the company. in as much as they own stock right they really have no

say well that's what's really interesting many of those are there's some other one person one vote co-ops as well but what's interesting about the east but then we can get technical about it is it changes the ownership pattern and in most cases hasn't moved to democratization of decision making but there's a trend within the east movement now for instance if you go to ohio which has been most studied as people get more shares and not surprisingly they begin to want more action and wanted more decision making and you're also seeing some unit unionization and so i think and again i'm historian i think of decades going forward i think we're going to see that whole movement of the the even moving forward towards more democratization more control taking over some of it unionized there's a movement within but it's a very interesting developmental pattern that the press has been covering as a as a historian do you see parallels between this and the grange movement in the late

nineteenth century i mean this was farmers getting together and saying ok the big banks new yorkers gaming the system the production companies are gaming the system we need to organize ourselves and these were not unions this were a whopper off of the crops yes and this was huge the you know and i think that i think there are parallels and also parallels in the patterns of building up over time. when you think about the the new deal for instance most of the new deal was developed in these small experiments and states around the country that justice brandeis called in the laboratories of democracy but they were in fact state by state were doing labor law they were doing pension law they were doing safety law that built up those principles small scale when the moment came they were just the same principles that became large scale at the national level and i think that's the kind of way to think about these co-ops and work or own companies or two thousand municipal utilities another way to change and democratize twenty five. out

of american electricity today twenty five percent is either it's a socialized if you like municipal utilities or co-ops so there are there are things on the ground that when you actually dig in that's what america be on capitalism attempt to do just report on this and then say what does that look like it doesn't look like corporate capitalism if you extend the principles and it doesn't look like state socialism it's a new it's an american model something different under the sun which i think is slowly emerging and with intention political intention when there's politics i think we can begin to promote and develop this in the way fourteen states are considering state banks public banks like the bank of north dakota so you see this kind of movement beginning to take these principles to a new level and again if you look at it as this is. the developmental pattern the next couple decades not the next election that's where the groundwork the foundation potentially gets laid it's all positive in any case but potentially developing principles that move to the national level much larger scale at the

right moment the. i was in argentina and he doesn't want to think of was it was right after they had basically told the i.m.f. to take a leap and months after and in middle class neighborhoods you would see every other house people had their furniture on the front yard trying to sell it because you know they've just been devastated and a lot of the factories are closing but people continued to show up for work and they said damn it we're taking this factory back and i understand that that has grown tremendously back since then. is that in. my i think we're going to see some we saw some of that in chicago but the three years ago there was a takeover there where the company said and they said we're going to stay and they turned it around but what's really interesting about argentina though these are worker own companies many of them now after the take it was called many of them now are connected with the municipal ownership that the city of atlanta seris provides . contracts and procurement and buys from them to help stabilize these companies

almost something very similar is now happening in cleveland where the big hospitals and the big universities are beginning to buy from work or own co-ops in that area so you get a complex that both work or own but it has a community building idea and link to something much more stable and i think that's a really interesting model it is and that way the worker owned businesses know that they've got customers down the road they can they can budget budget out we'll be back with more conversations the great minds of professor got alfred's and just about. we just put a picture of me when i was like nine years old so if you tell the truth. i think i am going to get of that i would rather get caught and.

he was kind of the jester. i'm very proud of the world without you see it's place. talk about your conversations with great minds and i am speaking with historian and political economist gar l. provides the. you we've been talking about how change happens and how the system has been put together in america and kind of these cycles of history also that were seen as is and you were talking about worker on cooperatives some of the examples in chicago. i think most people think when you say work around co-op most

people think my local health food store you know or sometimes it's a garage and there are there are a lot of those around the country. but these are fairly small scale things scale this up to reach the kind of mass necessary to create a stable flywheel part of a very complex and constantly moving economy well it's obviously first it's a development process over decades but there's some really interesting experiment going on in cleveland we were talking about that before and these are not your corner grocery store or little co-ops for instance there's an industrial scale laundry there it's about the greenest ecologically in the entire part of the midwest there it's in the lead gold certified structure and it serves its of large scale system they also is a solar installation got these are all work around solar installation company that is on line to produce more solar installations than the entire state of ohio

already has and there is another company and they are putting about two on the line every year i think is the the pattern another company there is a greenhouse solar heated greenhouse in part solar heated but again not your corner grocery store we're talking about three million heads of lettuce a year that scale so the idea is there's no reason these can't be scaled up worker ownership and worker participation the studies show hands down productivity goes up retention stays up training costs go down because people are to retain just what you might expect if people have an ownership stake and so i think we're going to see scaling something like some of the things that we talked about in spain where they've gone really much larger on the same principles and i suspect that's one of the directions again over the next decades and particularly as other things are failing that's really the context the context is critical here if everything was working fine you would be seeing people developing new things but things aren't working. and so we're seeing very just under the surface all over the country this

kind of thing is beginning to pop up well and in spain several generations ago this young priest showed up and moderate in this town that was kind of falling apart the basque region of spain and said let's put something together and they've developed this amazing thing. we've both been there you've spent a lot more time there and a lot more research on the curious if you'd share with our viewers in particular what is the monitor going cooperative ones that are gone underground yes and and why is it of consequence to us here in the united states what can we learn from it and what are the upsides and downsides to go to the vest fascinating it is becoming the model of interest around the world and basically it was started something like fifty five years ago by a priest in that area there were no jobs and again that's like cleveland or detroit no jobs and the question was how do we build and he started in a complex way started with a school actually an engineering school trying to train people they are now eighty five thousand people working in almost eighty different co-ops but they're linked

together with a financing system they're linked together training programs and it is it is real worker participation that you people make the decisions up and down the line you find the shop clerk on the board of directors and you find people making a real participatory strategy and it's highly productive and very very effective and we're not talking about agriculture i'm just they have supermarkets they have medical equipment advanced research they do high tech they do the construction just like any major it's a it's a multinational corporation of that scale and a multi-billion dollar mud took about two billion dollars so it's a it's a model that tells you what can be done and it gives you really new ideas because it's neither and i think the essence of this book in america beyond capitalism you don't have to have it either capitalism or socialism the state socialism the corporate capital and it doesn't have to be half of this to have a high. there are new things to do and undergone is one of them going to run into

some problems so it's not the full answer because it's now run into the world market it's so big and the chinese and the east europeans are beginning to undercut them and some of their markets so they're looking for more and they're actually over here now trying to help set up set up companies with the steelworkers union and others around the country at leo gerard has been yes he's all all over board here i love the topic yeah it's happening here they're coming over the coming here really looking for markets for jobs and so forth and if you go back to what i was saying about going to seris or these hospitals i think it's a more interesting model the some of the work in cleveland has been based in part on monday but trying to use these institutions that are partly publicly funded hospitals have got a lot of medical money in it and universities to stabilize the market by purchasing some part of what they produce they're not always up against the competition you get more stability at the local level so those kind of mixes of bones to planning system to help stabilize but also be in competition so you get don't get too too

much you have to yourself without competition and the really interesting developments of this kind or are happening i was in madison a few months ago and talk to the people who run the union cab company and there's a manufacturing company there. this manufacturing where to and guys and actually all kinds of fancy stuff work or own cooperated and one of the things that i discovered was that many states most states the states don't have a corporate charter provision in their state laws that would allow these kind of companies to even come into existence and and you know be recognized by the state as a legal entity and be appropriately taxed and regulated and all the things that are necessary for a company to to exist you write about b. corporations and we only have four states and so far. so far so what is a big corporation why only four states and how many states even allow things like

just basic genuine work are owned and run cooperators i don't know the answer to last question but i do know that people have wrinkles in the law where you can change the corporate charter and do it as a business or as a nice and find democratic participation democratic control and there are ways to develop within the law legal structure and in some states change the co-op laws but so a big car is that in that example we have a deer in them and just over here in maryland so under jamie raskin was behind doing that very bright young senator it's a very simple idea if you are a corporate chief or you're on the board your legal responsibility is to make profits for the shareholders and if you deviate too far from that and try to do good things for the community and spending too much corporate money you are legally subject to challenge by the stockholders you talk about dodgy ford back in the thirty's and michigan supreme court i think that's the issue so because you just it's

a different form of incorporation that is set up so that you are allowed to actually do things for the community and then if someone invests in that kind of a because they know what they're getting into and they support you for that reason then that takes the law just changes that wrinkle in the law and opens up ways for environmental or community contributions it's very interesting you know up until the the mid eighty's ninety's i think it was when it whenever kicked out john rockefeller and the charter modern era is about six or seven year period there were all the states were changing their corporate charter laws and this massive competition on these coasts the delaware end up winning all the new jersey ended up with john rockefeller. prior to that time pretty much every state the united states required that the first sentence of articles of incorporation be this corporations established to enhance or support or serve the community of fill in the blank and to manufacture railroad cars. and that requirement that their first

obligation be to serve the community was stripped out in virtually every state during that that little went out basically one decade window and then over the next thirty or forty years every other state took it out couldn't we just put that back where we could we could win the vote one way to do it and then to have some say seeks you don't have a problem right that that is a possibility what's happened of course is gone in the other direction personhood you haven't really time to challenge that whole idea of corporations initially in a way back in the first part of the country and also britain were chartered by the government to do a public purpose that's right but not original corporation as well exactly and all of the big corporations but there was no such thing really for all purposes or as a corporation for just to make money it was a it was an institution set up by the state and chartered to do economic activity for the good of the society and you could make some money doing that but it was very narrowly defined we've got a long way from that now so that another there are people for all of the intensive

purposes and the railroads reconstruction that was kind of the pivot point for sure after the civil war. so. the the occupy wall street movement in it seems to me that. there are some incredible parallels i just discover that there's a book about the hoovervilles you know that we have all these who have bills in the right late twenty's early thirty's and the biggest one was in seattle the bearer of seattle or the mayor of the hooverville in that city was a fellow by the name of jesse jackson and he wrote a book about you know the experience which we're. trying to track down right now the pieces of it and. there. there are flaws found their behavior seemed really similar to the occupy movement i mean they were occupying territory all over the country and local governments would come in and knock them down burn them out kick them out they'd come right back. do you see history repeating itself do you. the occupy movement is something that might propel this forward or is that

just an interesting analogous parallel well i think what's interesting about the occupy movement is that they they have occupied as a way of raising consciousness spectacular raising of consciousness they've really cracked open the whole debate with just some kids sitting down but i think they're interested in new ideas and where the where do we take it beyond that into politics beyond the hoovervilles getting out in the communities doing politics building new institutions i think that direction is put a part and parcel of where that's going to go and hopefully it will begin to take we've had a great deal of interest in all of these models because it gives people something to hold on to and build forward with so i think they're going to be very political as well as institution building if i'm curious in the in the two minutes we have left here your thoughts on how politicians how how are your ideas being received here on capitol hill or in the various states whether it's the idea of state banks you know more of a micro level or at the macro level you know just changing fun of the fundamentals of capitalism well it's very interesting because it isn't bipartisan but for

instance in the state of indiana the very conservative republican treasurer is putting state money in down in a way as deposits to lower interest rates for worker own companies and over on the other side sherrod brown has been toying with legislation to help to develop worker co-ops so there's kind of kind of an interesting thing i don't think it has been shaken out yet and of course when we get to the larger level when some of these banks and the wall street banks are i'm sure there's going to be a big fight when the next big crisis comes there's going to be demands that take them over and that's going to be a big fight politically but at the local level in some areas there's a lot of kind of coherence that you don't find the same kind of ideology in most local areas particularly when there's a great deal of economic pain and people are looking for answers and that's what's very interesting about this period is there any any conversation about this on capitol hill there are there is some conversation there's a co-op bill is being and she was introduced this week to. foster co-ops this is the year of the co-ops the united nations there's this work that i think the aesop

form. of the one of the most conservative members of congress is calling for aesop's that are one person one vote so there's a very interesting just under the surface left right kind of experimentation in this area that probably again has the pain deepens people i think are going to be doing much more of this that's remarkable and important stuff professor alberts thanks so much for being with us thanks for having. me just put a picture of me when i was like nine years old so she told the truth. that i am going to get a friend that i would rather have coffee and. she was kind of yesterday. i'm very proud of the.

it's play. well go back to the big picture i'm tom hartman in washington d.c. coming up in this half hour we'll revisit a conversation with great minds i had just last month with professor francis fox been a professor pivot and has devoted her life to activism on behalf of the poor and working class in america and she's been an outspoken critic of war going back as far as the vietnam war. so this week's conversation is the great lines i'm joined by francis fox pivot for the past thirty years she's been a professor of political science.