Crowd-funding for a film on employee owned pathfinders

Altorg2 from Patricia Murphy on Vimeo.

Patricia Murphy is an award-winning documentary film-maker. The short teaser for her new project can be seen here. She needs money to make the full film, and will be crowd-funding part of it. Watch this space.

For the producer, Mary-Ann Beyster, I recently screened the film ‘We The Owners’ at the Subversive Film Festival in Zagreb. About 70 people came, and the debate afterwards finished only when we were thrown out of the cinema to make way for the next film. About half of the young people in Croatia are unemployed – but the country’s financiers continue to get rich, and their politicians continue to reduce the cash for the unemployed, so that they can join the EU in July. No wonder there is interest in an alternative, which treats people as people, which listens to their views, which enables them to make a full contribution, and which ensures that they share in the wealth they create together.
This project is hugely important and needs cash.

Strengthening Democracy

StrengthenDemocHeaderThe first of four workshops was held recently in Glasgow, in the Scottish Universities Insight Institute, on the theme of Strengthening Democracy. The key topic was to look at the ways that employee ownership strengthens democracy in the communities around the employee owned firms. David Ellerman opened, with a survey of his search, when he was a young philosopher, for the intellectual basis on which capitalism is founded. He was at that time (1960s) convinced that capitalism was by far the best system in the world, and so set off on his quest for its philosophical foundations with some confidence. However, what he discovered was that there is no valid basis for the key relationship on which our current system depends: employment. Examined dispassionately, the employment contract is a fraud – a way to remove from people the wealth that they create through voluntary cooperation with their work-mates; and to force them into a subservient role instead of acknowledging their autonomy. By contrast, when a company is owned by its employees the business consistently outperforms similar businesses conventionally structured. Why? Because people cannot give up their autonomy, and when they are forced in the conventional employment relationship to pretend to do so, they perform less well: they don’t identify with the business to anything like the same extent, and so they don’t think about it, they don’t feel so confident, nor so cooperative, they end up competing with their colleagues for hierarchical position instead of cooperating to innovate. There is overwhelming evidence that employee-owned companies are more productive, and the reason is that they treat people as the partners they actually are, whatever contracts they have to sign to get a conventional job.

Employees and Owners

WagesPercentGDPGetting a job is a good thing – it helps you stand on your own feet. Those who don’t have jobs tend to have worse health, higher divorce rates, earlier deaths. But in the US, the world’s strongest economy, those who have jobs have been getting less and less of the pie they have created. The chart shows the strong declining trend, from about 1970 to now, in how much of the pie employees get. If today employees got the 53% of GDP they did in 1970 instead of the 44% they actually get now, they would receive in their pay packets $1,350 billion more than they do get. That is very nearly $10,000 per person employed. That would alter the ability to pay mortgages and look after children.

DividendsPercentGDPWhere has the money gone? Over a third of it has gone to company owners. Dividends, shown in this graph, stayed between 2% and 3% of GDP from the 1940s to the late 1980s. Then the owners pushed them up to nearly 6% of GDP before the crash. In today’s terms, the owners took from each employee an extra $3,600 every year. Today, they still take $2,600 more from each employee than they would have in the 40s, 50s, 60s, 70s or most of the 80s. And it is rising.

How has this happened? The owners have simply been exercising their rights. Employees cooperate voluntarily to create the wealth, but have no right to participate in the wealth they create. The owners can legally take all the wealth for themselves, and in one way and another they have been exercising that right. Private equity leveraged buyouts, for example, are simply the ruthless exercising of the rights of owners, at the expense of everyone else, whether employee, supplier, customer or taxpayer.

It is different in employee-owned companies. The next blog will be about who shared in the profits of two major British retailers: Marks and Spencer, owned mainly by the financial institutions, and the John Lewis Partnership, owned since 1929 by a trust for its employees.

Marie Colvin and an Open Society

Marie Colvin 3

Marie Colvin.
Photo: Richard Flaye

January 22nd was the first anniversary of the death of Marie Colvin, the bravest person I have ever known. Her murder was a war crime: she and her colleagues, civilians all, were targeted by the Syrian army because they were broadcasting the truth to the world about the massacres carried out by the regime.

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Mr Jackal’s Hit Man, or, The Fiction of Employment

FrenchPresidentGunSightSuppose you are employed by Mr Jackal. According to the dominant economic theory, you have sold him your labour. Since you have sold it to him, he controls it: it is up to him how that labour is used. Mr Jackal tells you to go and assassinate the French President. So, since you are his employee and your labour now belongs to him, you go and assassinate the French President.

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A Case Study: Employee Ownership worked, IPO led to failure, and why

Download the ‘TR-Inveresk’ pdf file to read the case study:

TR Inveresk

Productivity: The Employee Ownership Effect

Productivity: The Employee Ownership Effect

This case study tells the fate of two paper manufacturers in Scotland. They were similar in every way except one: their ownership strategies. Inveresk carried out an MBO – Management Buy Out – and then floated their shares on the stock exchange. Tullis Russell chose an EBO – an All-Employee Buy Out. Inveresk, which started well ahead in terms of productivity, slowly declined and eventually went bust. Tullis Russell’s employees – who all together had control of the company – increased their productivity dramatically year after year after year, as shown in the graph. Yet again, employee ownership showed itself to be better for all concerned than the plc-Stock Exchange route, which extracts wealth instead of building it.

 

Are we peasants or partners?

Peasants' RevoltPeasants of old right across Europe, and doubtless in most other parts of the inhabited world at the time, were ruled by rich and powerful lords and knights and bishops. And how did the lords and knights and bishops become rich? By taking stuff from the peasants they ruled. And when they wanted more, they took more. If the peasants objected they were thrown into prison, tortured and executed, often publicly, to encourage the others to be more obedient.
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Kindle Version of ‘Local Heroes: The Liberation of Loch Fyne Oysters’

LocalHeroes eCoverThere is a new, cheaper version of the book originally published by Penguin as ‘Local Heroes: How Loch Fyne Oysters Embraced Employee Ownership and business success’. The new version looks like this, and is renamed ‘Local Heroes: The Liberation of Loch Fyne Oysters’.

The book tells the exciting entrepreneurial story of how this sustainable seafood company was founded and built, against the odds, in the wilds of Scotland. On the death of one of the two founders, the employees won control of the company in the teeth of other potential buyers. The employee-owners then worked to make a success of their business, and achieved huge uplifts in productivity.

Caring for Old People – or Bleeding them Dry

CaringForOldWhen financiers take over businesses, customers need to watch out. Look at Southern Cross. Rather than improving the care of the elderly residents of their care homes, Blackstone manipulated the financial structures and arrangements to extract over £1,000,000,000 – a billion pounds – in cash. The result? Suffering for the old people.

By contrast, when employees take over the company where they work, they strengthen the services, and invest. Sunderland Home Care, Highland Home Carers, Stewartry Care and several others are among the top rated carers for old people. In each case, the care is delivered by people who share in the ownership of the business. And in child care, the same story: by far the best provider of children’s nurseries in England is Childbase Partnership – owned by its employees.