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Norman Kurland and all others
I have read "A Personal Journey to a Third Way." Your
lifetime of work
on this subject is truly impressive. You have seen the
idea through its
gestation phase, the blossoming and now its growth.
You truly have tenacity and stick-to-it-ness. You also
appear to have
great patience. But now you see the results. Or to
be more accurate,
now you see the results in the United States of
America
In the rest of the world the idea is growing more
slowly. It would have
been a good idea for Russia but that opportunity seems to have
been
lost.
If I examine why it is growing quickly in the US and not
elsewhere
I come to the conclusion that it is because of the lawyers,
bankers
and others who are able to make a living putting the deals
together.
As well, the tax legislation is such that it is advantageous
to the
owners to sell to ESOPs. To be precise, and to paraphase
the
Clinton 1992 election slogan, "It's the money,
stupid."
How can we convince the unions and coops that they would be
better off financially if they were to adopt
ESOPs/CSOPs?
Presently, neither group is looking for anything other
than
employment. The union leaders want to keep their jobs
and
the leaders of the coop movement want to keep their
jobs.
Many of them don't seem to be looking beyond that.
Am I correct when
I make this statement? And if I am correct, why is it
that the
union and coop leaders are not able to see other
possibilities?
Or maybe I am more accurate when I say this of the coop
movement and less so of unions. As has been pointed
out to me, many unions support the idea but I don't see
a major push by unions to obtain more ownership for
their
workers. It is not the union leaders who are at the
forefront
of the ESOP/CSOP movement in the US or anywhere
else.
Is the profit motive the way to ignite this idea elsewhere
or
am I on the wrong track? Must we only be altruistic in
working
on the ESOP/CSOP concept or should we change our
thinking
so that we and everyone else who looks at this looks at it
for
personal gain? Would this thinking destroy a good
concept
just as short term thinking about personal gain has had
negative implications for other things? Or instead would
it
ignite the idea and make it grow more quickly?
Barry Randall
Ottawa, Ontario, Canada
----- Original Message -----
Sent: Sunday, November 21, 1999 10:35
PM
Subject: Re: Unions and coops
Dear Barry, Tim, Dan and the ESOP Privatization Community,
There is a way for genuine labor leaders to be sold on ESOP/CSOP plus the
"real third way." But it takes a gutsy, authentic leader like the late
Walter Reuther of the UAW. I worked as the CCAP's director of planning
for Reuther when he headed the Citizens Crusade Against Poverty from 1965-1968
and brought him together with Kelso in 1966. Reuther, who was committed
to the "revitalization of the labor movement" testified on February 20,
1967 before the Joint Economic Committee of Congress that year and
pointed out that "stock distributions to workers would help democratize the
ownership of America's vast corporate wealth which is totally appallingly
undemocratic and unhealthy. . .If workers had definite assurance of equitable
shares in the profits of the corporations that employ them, they would see
less need to seek an equitable balance between their gains and soaring profits
through augmented increases in basic wage rates. This would be a
desirable result from the standpoint of stabilization policy because profit
sharing does not increase costs. Since profits are a residual, after all
costs have been met, and since their size is not determinable until after
customers have paid the prices charged for the firm's products, profit sharing
[through wider share ownership] cannot be said to have any inflationary impact
upon costs and prices." (Page 774, Part 4 of "Hearings, The 1967
Economic Report of the President, Joint Economic Committee, 90th Congress, 2d
Session.)
To give you some more background on the successes and failures of Kelso and
me in promoting the "pure Kelsonian" principles and applications among U.S.
and non-U.S. labor unions, please visit the CESJ web site at http://www.cesj.org and read the labor sections
of "A Personal Journey to the Third Way", the case study on South Bend
Lathe, and the long paper on Value-Based Management, which you can retrieve
from the CESJ "Site Map."
Dan was with me when I made a presentation before the former communist
labor unions in Moscow and he saw the positive response I received in making
the case for labor's very significant role under the "third way."
Working for the Banana Workers of Guatemala in 1972, Joe Recinos and I came
very close to acquiring all of United Fruit's banana plantations through a
leveraged ESOP with the backing of the U.S. anti-trust division of the
Department of Justice. In Egypt in 1987 we worked with the head of the
Chemical Workers Union to implement the first leveraged ESOP in the developing
world at the Alexandria Tire Company, a joint venture with Pirelli Tire of
Italy. In Argentina we developed a leveraged ESOP for the Argentina
utility unions in privatizing the San Miguel nuclear power plant. In
Bangladesh we are now working with all the textile worker unions to privatize
9 textile mills which the Prime Minister wants to "turn over to the workers."
So, Barry, Tim and Dan, the key to getting organized labor aboard is
challenging the leaders and even going over their heads to the rank-and-file,
when appropriate, to abandon the feudalistic wage system, which is the cancer
of every economy on the globe today and to return to roots of democratic trade
unionism by spearheading economic justice for all members of society.
(See our definition and paper on economic justice on the web site.)
Norm Kurland
Center for Economic and Social Justice
Web: http://www.cesj.org
Barry Randall wrote:
When I sent the original message
on unions and coops I was hopingto find out why unions
had not embraced ESOPs and why coopshad not embraced
CSOPs. I was hoping to find a way to convincethese two groups to join "the ESOP/CSOP movement." Now after reading Tim's message I want to change the
question.How could we take the best union ideals and
framework along withthe best from the coop movement and
merge them with the bestfrom the ESOP/CSOP
concept? Is there common ground betweenthese
concepts where they could all be improved upon? Barry RandallOttawa, Ontariobrandall@fox.nstn.ca
-----Original Message-----
From: Tim Mitchell <pentim@netspace.net.au>
To: EOpriv@cog.kent.edu <EOpriv@cog.kent.edu>
Date: Wednesday, October 27,
1999 9:33 AM
Subject:
Unions and coops
I've just read Barry and Dan's contributions re above with great
interest. I think
that's an excellent discussion point. I've wandered to myself how to make
coops and esops compatible in a meaningful, practical and significant
way. In Australia,
there is a new group called Mutuality Australia which I will try and vend
in to this discussion. They are committed to the promotion of coops and
third way type ideas. I'm also going to forward your comments Dan to some of the high
level bureaucrats in my Department of Fair Trading. They administer
registration of coops in this state and I have prompted them to develop
some thoughts on CSOPs in light of our pending competitive electricity and
gas market at all levels including residential. They are keen to set up a
discussion group within the Department on the subject and assuming we come
up with something useful feed it in to the regulation formation
processes. I'll keep
you posted. Cheers Tim
Mitchell
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