Re: Stock Quid Pro Quo for Gov't. Largesse Idea for SeattleWTO Globalization Teach-In

[Deborah Groban Olson <dgo@esoplaw.com>]

Dear David:

        Thanks for the information. To further clarify my response, the idea I
sent you is one of many we are reveiwing. Another is opening the Federal
Reserve discount window to provide very low interest rates to employee or
community owned businesses. Additionally, we are collecting data on best
practices in employee ownership around the world at regional, national and
transnational levels. We work closely with several groups involved with the
creation of labor venture funds, and see a logical link between such funds
and our efforts. Our current focus on the employee ownership aspects of
broadened ownership are shaped by the requirements of our current funding
from the Ford Foundation. Our mission and vision extends to other forms of
reorganizing asset accumulation.

        I see the Seattle activities as a means to bring a broader set of
constituencies into our global on-line discussion of both ideas and
implementation strategies, and to connect our discussion to others already
in progress. Can you suggest a means to accomplish this?  How do we get
connected to the International Forum on Globalization?  We are primarily
practitioners creating capital broadening organizations on a daily basis,
who wish to share our skills and ideas with people working in other venues.

        Deb Olson
At 11:47 PM 8/30/99 -0700, you wrote:
>Thanks for your extensive reply. The elaboration you provide on your
>ideas is very helpful to me in further understanding the nature of your
>approach. You will find a good deal on my background in either of my
>major books--When Corporations Rule the World and The Post-Corporate
>World: Life After Capitalism--which I gather you will be looking for at
>your library or bookstore. The latter deals with stakeholder ownership.
>
>I assumed in my earlier communication that you had some knowledge of the
>International Forum on Globalization (IFG). It is a formation of a
>number of the world's most articulate and active leaders in the citizen
>struggles against international trade and investment agreements that
>strengthen corporate rights and freedoms at the expense of human rights
>and freedoms. Tony Clarke is a Canadian who works with the Council of
>Canadians, authors books on the global economy, and chairs the IFG
>corporations committee. John Cavanagh heads the Institute for Policy
>Studies in Washington, DC, writes on global corporations, and heads the
>IFG committe on the international financial system. 
>
>Tony and John are the one's with lead roles in planning the IFG events
>around the WTO meeting in Seattle. I'm not directly involved in setting
>the agenda or selecting speakers, but simply wanted to endorse the idea
>of giving attention to the importance of broadening participation in
>ownership.
>
>With best regards.
>
>Dave Korten
>
>Deborah Groban Olson wrote:
>> 
>> Dear David:
>> 
>>         Thank you for your response to my email to Mike Dolan.  I have
>> not seen your book, but I will look for it. Please tell me something
>> more about you, your organization, and also who Tony Clarke and John
>> Cavanaugh are and what they do.
>> 
>>         I would be delighted to assist in the Seattle plenary or other
>> related efforts. Regarding non-democratic ESOPs, I have been a major
>> proponent of participative employee ownership for years. Please see my
>> website www.esoplaw.com, which includes many of my law review articles
>> such as "ESOPs for People, Not for Wall Street."
>> 
>>         I am currently working on an article on the ICC aspects of the
>> WTO and its world government constitutional ramifications. The
>> essential point is that throughout US histsory, the ICC has been the
>> engine of increased federal power and decreased state power,and that
>> civil society must retain ultimate authorithy over the interests of
>> commerce.  In some cases, like the New Deal legislation, the broad ICC
>> reach has been a good thing. But the New Deal was created in response
>> to enormous agitation in the streets for social and economic justice.
>> 
>>         In response to your request for specific proposals, that might
>> be discussed at your Globalization Teach-in, following is an excerpt
>> from a proposal I am only now sending out to the COG Homestead
>> discussion group. It has not yet been reviewed or discussed by the
>> others. It is a concept that could be used in international trade
>> agreements or charters or in national or regional constitutions or as
>> legislation.
>> 
>>         It is not a COG position. At present it is solely my
>> responsibility. I began working on it based on conversations I had
>> with Bill Greider on solutions to the problems he outlined in his
>> book, One World Ready or Not, the Manic Logic of Global Capitalism.  I
>> highly recommend his book for both problem exposition and an outline
>> of some solutions.
>> 
>>         My proposal is still in development.  I hope to have in a more
>> useable and publishable form as of the November 30 events.  Please do
>> not publish it without my consent, as I would like to further refine
>> it. However, a rough draft  is:
>> 
>>         " One of several proposed solutions to the problem of capital
>> concentration is: broad individual ownership of productive capital by
>> the general population, derived from future retained earnings, NOT
>> expropriation of existing wealth. This particular proposal is one of a
>> number being discussed on-line at the Capital Ownership Group/ virtual
>> conference center at http://cog.kent.edu in the “Industrial Homestead
>> Policy",open to the public.
>> 
>>         (This group is discussing several proposals related to the
>> WTO. In various ways they all deal with requiring corporations to
>> distribute ownership to employees, local communities and/or the
>> general public in exchange for benefits they get from either trade
>> agreements or governments. COG invites participation from others who
>> are interested in serious discussion about creating proposals,
>> implementation strategies and vehicles. COG’s primary concern is to
>> develop an ongoing coalition to create a viable alternative to the WTO
>> model that meets the needs of people in the developing and the
>> developed world. We want to create policy proposals around which
>> people's organizations can coalesce and organize.  COG is building an
>> on-line library and welcomes articles and links to other websites.)
>> 
>> 
>>  Stock Quid Pro Quo Proposal
>> 
>> 1) Intent: Stock to workers, citizens and labor-venture funds as quid
>> pro quo for government largesse
>> 
>> The intent of this proposal is to reverse concentration of capital,
>> provide a stream of income for all citizens, and give citizens a voice
>> in governance of major corporations.
>> 
>>           a)      Use existing government largesse to businesses to
>>           require distribution of capital to citizenry at large.
>>           b)      Create a diverse electorate within corporations as
>>           political hegemony transfers from nation-states to global
>>           corporations.
>>           c)      Create new private, stock fund entities, modeled on
>>           the Canadian Labor Venture Funds, to manage these assets in
>>           the collective self-interest of the citizen-shareholders.
>>           d)      Use the citizen-shareholder funds both to educate
>>           the citizen-shareholders and to help them wield their market
>>           power in the interests of local communities.
>> 
>> 2) Proposed Language
>> 
>> This is rough draft model language for amendment of national
>> constitutions, model state or local legislation, might serve as a
>> “green light subsidy proposal” in international trade proposals such
>> as the Multilateral Agreement on Investment (MAI), the North American
>> Free Trade Agreement (NAFTA), the Free Trade Agreement of the Americas
>> (FTAA) and other similar international agreements on investment and
>> trade, or as an addition to the UN Charter or in other international
>> agreements such as a policy direction for the United Nations
>> Commission on Trade and Economic Development (UNCTED).
>> 
>>  “In exchange for government largesse (from every level of government)
>> to businesses require governments to provide a quid pro quo at fair
>> market value to the common weal.”
>> 
>> 3) Definitions of these terms (perhap in enabling legislation):
>> 
>>  “Commonweal” means private or public entities, including
>> non-governmental trusts, employee trusts, community trusts, stock
>> funds, investment funds, co-operatives, for-profit and non-profit
>> corporations, and other entities provided they met specific tests of
>> bona fide interest in protecting the long term economic, social,
>> ecological and/or cultural interests of the local citizens. When
>> developed in greater detail this definition shall provide mechanisms
>> for responsible parties, such as labor-venture funds (such as those in
>> Quebec and Manitoba fashioned under the Canadian labor-venture fund
>> law), community development financial institutions, credit unions, and
>> other certifiably locally controlled financial institutions to hold
>> the quid pro quo stock responsibly in a manner that would encourage
>> public markets to continue to invest in these companies and
>> communities.
>> 
>>  “ Government largesse” means any tax deduction, abatement, grant,
>> government subsidized or guaranteed loan, license, lease, concession,
>> or contract, etc.
>> 
>>  “Fair market value” has its current definition under the US Internal
>> Revenue Service and the US Tax Court ( or similar institutions in
>> other countries or within international trade law, if such a concept
>> exists therein and is as well developed as the US tax law concept.
>> 
>>  “Quid pro quo” means corporate common stock with the greatest voting
>> and dividend rights or preferred stock convertible into such common
>> stock or its equivalent in cash.
>> 
>> 4) Intended Effects?
>> 
>>      a)      Deter government units from competing with each other for
>>      corporate location by means that undermine local economies.
>>      b)      Build a diverse stock portfolio for every citizen over a
>>      generation.
>>      c)      Create a source of non-wage income and a vote in
>>      corporate decision from a diverse citizenry.
>>      d)      Create means for the new corporate citizenry to
>>      intelligently and collectively exercise their concerns by
>>      electing some members of the boards of directors of the funds
>>      that hold their stock.  The majority of the board members would
>>      need to meet fiduciary competence criteria and the funds would
>>      have to carry fiduciary insurance. The boards of these funds
>>      would hire professional managers.  Some of these funds could be
>>      pension type and others could be more like mutual funds or IRAs.
>>      Individuals would have the ability to move their funds every five
>>      years to a similar type of fund (i.e. pension money might have to
>>      move only to other pension type funds).  Thus the funds could be
>>      assured of patient capital, while individuals would have some
>>      ability to vote with their feet, and some ability to use their
>>      own capital to create new businesses, buy homes, educate
>>      children, etc.
>> 
>> 5)      What Next?
>> Use these proposals as a program (or part of a larger program) around
>> which to organize diverse constituencies concerned with capital
>> concentration and loss of local control by labor and local
>> governments, and as part of the civil society agenda for trade
>> negotiations promoted by citizen groups."
>> 
>> At 09:37 PM 8/29/99 -0700, you wrote:
>> >Deborah Olson: I was delighted to hear of your initiative via Mike.
>> It
>> >sounds like a wonderful and badly needed project.
>> >
>> >I also think your observation that the WTO agreements are the
>> equivalent
>> >of the ICC is right on target. As I'm sure you are aware, however,
>> the
>> >WTO arrangement is the equivalent of eliminating the U.S. government
>> and
>> >replacing it with an unelected National Trade Organization controlled
>> by
>> >the largest corporations with the power to over ride state
>> governments
>> >and constitutions to assure implemention of the ICC without regard to
>> >any other public interest. Even though the ICC left the U.S.
>> government
>> >in place, I suspect it has played a major role in strengthening
>> >corporate power over local governments and advancing the
>> concentration
>> >of wealth in the United States. Obviously the consequences globally
>> will
>> >be even more extreme.
>> >
>> >Whatever the case may be with the ICC, I suspect we might all agree
>> that
>> >broadening the base of real stakeholder ownership of corporations is
>> a
>> >far higher priority than expanding trade and the rights of
>> >corporations--and I endorse to my colleagues the idea that we should
>> >find a way to include this as a proposal on the agenda of the citizen
>> >meetings in Seattle. Do you have specific thoughts on action at the
>> >level of international agreements that would advance this goal?
>> >
>> >Are you familiar with the book I released in March this year: David
>> C.
>> >Korten, The Post-Corporate World: Life After Capitalism (San
>> Francisco:
>> >Berrett-Koehler Publishers, 1999). It presents a strong argment that
>> to
>> >create a global economic system that works for people and nature it
>> is
>> >essential to move toward more human scale enterprises owned by real
>> >stakeholders who have more than a purely financial interest in their
>> >operations. If you have not seen it I would be pleased to send you a
>> >copy with my complements.
>> >
>> >So far as I could tell from your website, your concept of broadening
>> >ownership participation is pretty much identical to the concept of
>> >stakeholder ownership dealt with in my book. I did not see mention on
>> >your site that a great many ESOPs are phoney efforts to free
>> management
>> >from accountability to anyone other than themselves and actually
>> deprive
>> >worker owners of real ownership rights, but I gather from what I read
>> on
>> >the website that your project is promoting the idea of real ownership
>> >with real participation in decision making. Right on. I believe this
>> >must be right at the top of the labor union agenda.
>> >
>> >Dave Korten
>> >
>> >Mike Dolan wrote:
>> >>
>> >> Thank you Deborah for your thoughtful inquiry and invitation to
>> join your IH
>> >> discussion.  Welcome to the coalition organizing for Seattle.
>> >>
>> >> I have copied your message to David Korten, John Cavanagh and Tony
>> Clarke,
>> >> who are collaborating on a plenary relating to the taming of
>> corporations,
>> >> as well as to the International Forum on Globalization, which is
>> organizing
>> >> one of their prize-winning Globalization Teach-ins for the weekend
>> prior to
>> >> the Ministerial itself, and also to our friend Bob Stumberg at
>> Georgetown
>> >> Law.
>> >>
>> >> I am very interested in COG's mission and the notion of a global
>> ICC; and I
>> >> look forward to seeing COG/IHP proposals that relate specifically
>> to the
>> >> WTO.
>> >>
>> >> Looking forward to meeting you in Seattle,
>> >>
>> >> Mike Dolan
>> >>
>> >> ===== Original Message from dgo@esoplaw.com (Deborah Groban Olson)
>> at
>> >> 8/26/99 2:44 pm
>> >> Original Recipient(s):
>> >> To: MDOLAN@CITIZEN (Mike Dolan)
>> >> Cc: Homestead@cog.kent.edu (Homestead)
>> >>
>> >> Dear Mike:
>> >>
>> >>         This is in response to an email forwarded to me by the
>> National
>> >Lawyer's
>> >> Guild Labor Committee, of which I am a member, dated 8/19/99
>> regarding
>> >> shutting down Seattle.  I am an attorney who specializes in
>> employee
>> >> ownership and capital strategies for labor. I am the chair and
>> project
>> >> coordinator for the Capital Ownership Group (COG), a global network
>> of
>> >> employee owners, attorneys, financial and other professionals who
>> create
>> >> employee ownership, labor leaders, community organizers, religious
>> leaders
>> >> and other activists interested in using broadened ownership to help
>> deal
>> >> with the negative effects of globalization.
>> >>
>> >>         We have created a virtual think tank, open the public, to
>> develop
>> >capital
>> >> broadening policy proposals and implementation stragegies. We
>> collect data
>> >> on best practices in employee ownership which we share with our
>> colleagues
>> >> worldwide. Our web site (virtual think tank) has five formal policy
>> >> discussion groups and several informal discussions, including
>> groups from
>> >> India, Europe and Mexico working on related issues.
>> >>
>> >>         One of the discussions I chair is the "Industrial Homestead
>> 
>> >Policy" group.
>> >>  That group is discussing several proposals related to the WTO. In
>> various
>> >> ways they all deal with requiring corporations to distribute
>> ownership to
>> >> employees, local communities and/or the general public in exchange
>> for
>> >> benefits they get from either trade agreements or governments.  We
>> invite
>> >> participation from others who are interested in serious discussion
>> about
>> >> creating proposals, implementation strategies and vehicles. We
>> would be
>> >> happy to participate in a teach-in or other events in Seattle.
>> However, our
>> >> primary concern is to develop an ongoing coalition to create a
>> viable
>> >> alternative to the WTO model that meets the needs of people in the
>> >> developing and the developed world. We want to create policy
>> proposals
>> >> around which people's organizations can coalese and organize.
>> >>
>> >>         Please visit our website http://cog.kent.edu to get a
>> better idea
>> >of who
>> >> we are.  I specifically request that you join our Industrial
>> Homestead
>> >> discussion. Most of the WTO related stuff has not yet been
>> distributed, as
>> >> I am working on it this week.  I have the AFL-CIO petition to the
>> WTO, the
>> >> CFED/Georgetown Law Center analysis "International Investor Rights
>> and
>> >> Local Economic Development" and an Australian proposal on a
>> Community
>> >> Investment Code  which I am trying to co-ordinate with proposals
>> for a US
>> >> Constitiutional amendment requiring a quid pro quo to the
>> commonweal for
>> >> any government largesse to businesses.
>> >>
>> >>         I am very excited about the coalition you are organizing,
>> and
>> >would like
>> >> to work with that coalition on a long range basis to develop a
>> strategic
>> >> approach for people's organizations to deal with globalization.
>> Not only
>> >> do we need concrete demands of or to the WTO and related
>> governments. We
>> >> need sound alternative proposals for creating global rules.
>> >>
>> >>         The MAI, NAFTA and the new agreements to be negotiated by
>> WTO or
>> >OECD are
>> >> very similar in global scope to what the Interstate Commerce Clause
>> was for
>> >> the creation of the United States.  However, there is no
>> corresponding
>> >> international constitution with a bill of rights being negotiated .
>> >>
>> >>         If the 8/19 article is correct, you are trying to unify the
>> 
>> >protest in
>> >> Seattle around a demand that the trade ministers take stock of the
>> effects
>> >> of existing trade agreements. That is a worthy goal, but I hope the
>> >> unifying demand can be more pro-active. I would like the coalition
>> to have
>> >> a concrete set of demands dealing with dispersion of capital
>> ownership and
>> >> capital credit in addition to labor rights and, evironmental
>> protections.
>> >> Furthermore, if there is to be a group creating the global
>> equivalent of
>> >> the Interstate Commerce Clause, then there ought to be the
>> equivalent of a
>> >> constitutional convention occuring along with it. What is the role
>> of the
>> >> UN in this process? What should its role be? What is the UN
>> Commission on
>> >> Trade and Economic Development's role?
>> >>
>> >>         I look forward to working with you and the coalition.
>> >>
>> >>         Please forward this message to other appropriate people.
>> >>
>> >> Sincerely,
>> >> Deb Olson
>> >>
>> >> Deborah Groban Olson
>> >> Project Co-ordinator
>> >> Capital Ownership Group Project
>> >> Ohio Employee Ownership Center
>> >> Kent State University
>> >> 3163 Penobscot Building
>> >> Detroit, MI 48226
>> >> (313) 331-7821 or (313) 964-2460
>> >> (f) (313) 331-2567
>> >> email: dgo@esoplaw.com
>> >> web site: http://cog.kent.edu
>> >>
>> >> ****
>> >> NEW CITIZEN'S GUIDE TO THE WORLD TRADE ORGANIZATION!
>> >> On the Internet at
>> http://www.tradewatch.org/publications/gtwpubs.htm
>> >> FOR MULTIPLE COPIES CONTACT APEX PRESS ---> JRizzi52@aol.com
>> >> ****
>> >>
>> >> In accordance with Title 17 U.S.C. Section 107, this material is
>> distributed
>> >> without profit to those who have expressed a prior interest in
>> receiving the
>> >> included information for research and educational purposes.
>> >>
>> >> Mike Dolan, Deputy Director
>> >> Public Citizen's Global Trade Watch
>> >> ph  202.454.5122
>> >> fx  202.547.7392
>> >>
>> >> Subscribe to TW-LIST, the Global Trade Watch list-server.
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>> >
>> >--
>> >David C. Korten
>> >PCDForum
>> >pcdf@econet.org
>> >http://iisd.ca/pcdf
>> >
>
>-- 
>David C. Korten
>PCDForum
>pcdf@econet.org
>http://iisd.ca/pcdf
>

Attorney Deborah Groban Olson
Vice-President
Shared Equity Strategies, Inc.
3163 Penobscot Bldg.
645 Griswold St.
Detroit, MI 48226
(ph) 313/ 331-7821  or 964-2460
(f) 313/ 331-2567     or 964-4065

dgo@EsopLaw.com
www.EsopLaw.com