Co-ops a Large Scale Solution? No.

Can Co-operative Economic Enterprises Make Our Society a Good One

on a Large Scale?

by John Spritzler

July 29, 2015

The URL of this article for sharing it is https://www.pdrboston.org/coops-the-solution-no

Dear reader: Please keep in mind that the question this article addresses, as the title indicates, is whether co-operative economic enterprises can make our society a good one on a LARGE SCALE, not whether they can make life better for SOME people--which they can do. The point of this article is not that people should not create co-operative economic enterprises; it is that people should not believe that doing this is a substitute for building an egalitarian revolutionary movement that explicitly aims to abolish class inequality, as discussed here and here.

John Malone personally owns more than twice as much United States land as the acreage of the entire state of Delaware--twice! He owns 2.2 million acres of land. Ted Turner personally owns 2.2 million acres in 12 states and Argentina. Archie Aldis 'Red' Emmerson owns 1.84 million acres. Brad Kelly owns 1.5 million acres, the Irving family 1.2 million acres, the Singleton family 1.11 million acres, and the list goes on for the 100 largest landowners listed here.

The reason for citing the above facts is to begin a discussion about the extent to which ordinary Americans who want a more equal society can--or cannot--create a more equal society without making a revolution to remove the rich from power and to take the billionaires' excessive wealth away from them. In other words, what is it possible for us to accomplish if we just ignore the rich, and the fact that they own a lot of wealth, and use what we, the non-rich, own to set up co-ops and similar egalitarian economic enterprises? How much of the means of production--things like land and minerals in the earth and manufacturing equipment and buildings and raw materials, etc.--are not owned by the very rich, and hence are available to ordinary people to use in an egalitarian manner to provide for ourselves the products and services we want, without any need for a revolution to remove the rich from power?

Let's consider farmland. On the surface, the statistics suggest that a lot of farmland in the United States is not owned by the very rich, but rather by family farmers. The most recent U.S. Census report I could find on this is from 1993 and it reports that, "People [as opposed to non-family-held corporations] own most farmland. Some 2.6 million owners are individuals or families, and they own more than two-thirds of all farm acreage. Fewer than 32,500 non-family-held corporations own farmland, and they own less than 5 percent of all U.S. farmland."

The trend in recent years was described in 2013 in a report by the U.S. Department of Agriculture as follows: "Cropland has been shifting to larger farms. The shifts have been large, centered on a doubling of farm size over 20-25 years, and they have been ubiquitous across States and commodities. But the shifts have also been complex, with land and production shifting primarily from mid-size commercial farming operations to larger farms, while the count of very small farms increases." Thus our farmland's ownership is separating into a few who own a lot of land (and who may not be agreeable to it being used in an egalitarian manner rather than producing profits for their personal wealth) and many who own very little.

From the perspective of we the non-wealthy vast majority of the American population as a whole ("We the People"), there is an "elephant in the living room" factor that relates to the question of how much farmland we have available (i.e., that is not owned by the very rich) to use in an egalitarian way. This factor is the national debt. What is the connection between the national debt and how much farmland we have available? It's this.

The federal government owes (as of 2011) $14.3 Trillion (actually, this source says it's $46.1 Trillion) to rich people (or to organizations such people control.) The federal government is controlled by the very rich, not by We the People (for evidence of this go here), but it is We the People who are made to pay back this debt in our name (by being taxed.) The people who "own" the debt (i.e, the people who expect to be repaid, with interest for their loan to the federal government) are the very rich--people who have enough money to make big loans to the government. And they use that very government to extract re-payment (principal AND interest) from us; specifically they use the Internal Revenue Service and the threat of imprisonment for those who do not "pay up." The government could have (should have!) taxed these wealthy people (most are Americans, actually) instead of borrowing from them and promising to pay it all back with interest. Why didn't it do that? Because rich people, not We the People, control the government! The debt is therefore one we are morally not obliged to pay. But as long as the rich are in power, pay we must.

What makes this an "elephant in the living room" is this. We owe these rich people $14.3 Trillion, but the total value of all U.S. farmland and related structures is only $2.31 Trillion (as of 2012). This means that even if We the People owned ALL the farmland free and clear and we sold it all in order to pay back our creditors, we would still be about $12 Trillion in debt to those creditors! Clearly, We the People do not really own any of the American farmland in any meaningful sense of the word. To the extent that we do have nominal ownership of farmland, the creditors use the power of the government to make sure that the purpose to which we put that land is to pay back the debt, not to make society more egalitarian.

Let's now consider who owns the non-agricultural natural resources that egalitarian economic enterprises would require. To narrow the focus, let's look at what is presently a key energy source: coal. The U.S. government (not at all the same as We the People!) is the largest owner of coal reserves in the United States, followed by private corporations such as Great Northern Properties and Peabody Energy (go here for more details.) Peabody Energy produces the most coal, so let's see who owns Peabody Energy. This ownership information is provided here. Private individuals ("non-institutional" owners) own 20% of the company. The remaining 80% is owned by institutions, the top five of which are investment organizations such as BalyasnyAsset Management, LLC and Vanguard Group, Inc and State Street Corp.

Given that the 400 wealthiest Americans own as much wealth as 62% of the American population and the bottom 47% of Americans own no wealth (their debt exceeds their assets), it is a safe bet that the people who own the lion's share of the money invested in these investment organizations are very wealthy folks, not very many in the We the People camp. Each share of Peabody Energy cost $1.22 when the numbers for this paragraph were produced. One day a Mr. Gregory H. Boyce traded 142,576 shares, meaning he traded about $174,000 worth of Peabody Energy. This is the kind of person who owns a big chunk of Peabody Energy. How likely are people like this to say to We the People, "Sure, you can take our coal and use it for your egalitarian project. No need to pay us for it"?

I think it is pretty clear that paragraphs just like the one above could be written for other kinds of mines (copper, etc.). And paragraphs like it could also be written about manufacturing plants and equipment. Who do you think owns the bulk of General Motors and Ford Motor Company? But, one might hope, at least there are lots of small businesses, producing all sorts of products and services, that are truly owned by people in the We the People camp. Is this true?

No. It turns out that virtually every small business is owned by the entrepreneur in name only. The real owner is the bank that lent the money the entrepreneur needed to open up shop. The "independent" barber, for example, in his or her "own" barber shop is entirely controlled by conditions imposed by the bank to which he or she is in big debt. This is reflected in this article (from 2010) that reports, "With lenders tightening the reins on borrowers and prices for everything from materials to health care on the rise, many small-business owners are straining under the weight of growing debt. Last month, 8,113 businesses nationwide filed for bankruptcy protection--a 57 percent increase from the same time a year ago, according to Automated Access to Court Electronic Records, an Oklahoma City bankruptcy data and management company."

The unfortunate fact is this: We the People do not own enough of America to enable us to create a viable egalitarian economy for all of us. The means of production that such an economy requires are owned by the very rich. Sure, in little corners of society here and there it is possible for relatively small numbers of We the People to get control of enough means of production to create a little island of egalitarianism. But here's the rub.

First, because the very rich own the lion's share of the means of production, it is not possible for these little islands to grow large enough to include all, or even a lot, of We the People and provide the products and services they reasonably desire. The rich know this. We should accept the reality of this fact as well, and not engage in wishful thinking and denial of this fact.

Second, the rich want We the People to think that we can make an egalitarian society on a large scale without removing the rich from power. This is why Big Money foundations often fund cooperative social experiments (such as Ubuntu, whose Ubuntu Education Fund received $5,000 from the Tides Foundation--which gets its money from the Rockefeller, Ford, Heinz foundations, George Soros and similar Big Money sources--in 2014) as long as they do not talk about, and certainly do not organize for, removing the rich from power to create a society with no rich and no poor. Big Money does this for the same reason it keeps telling us to vote. The very rich know that as long as people believe that something (voting or creating some kind of "alternative" economic enterprise) other than removing the rich from power can make our society more equal and democratic, then the rich have nothing to fear.

For discussion about how we actually CAN remove the rich from power to truly make ours an egalitarian society, please visit PDRBoston.org .