Sen. Elizabeth Warren sits down with CNBC's John Harwood for a "Speakeasy" interview. "I believe in markets," she said. "But only fair markets. Markets with rules." (Source: CNBC video 7/24/2018)
Originally published on Common Dreams, April 26. 2019
My headline poses a question I struggle with.
“Capitalism” suggests an economy driven by owners of private capital, typically with the aim of bringing the highest possible return to themselves, and I am sure that is not what Senator Elizabeth Warren stands for.
Warren has made clear that what she wants (and I do, too!) is “accountable capitalism,” a market economy that works for all of us because it responds to all of us—a market that’s truly competitive and always open to newcomers. Not what we have now.
Today in the US, just two companies control more than half the market in twelve major industries. Four control nearly 90 percent of the total global grain trade. Six control 90 percent of American media, and four control over 80 percent of air travel.
What Warren lauds are “fair markets, markets with rules.” Without them, she explains, it’s “about the rich tak[ing] it all…And that’s what’s gone wrong in America.”
So, I wonder, why call oneself a capitalist?
Capitalism and a market economy are not to be conflated. A market is made more vital by including many enterprises that are not owned by capital. They include cooperative, community-owned, and publicly owned enterprises. Plus, there are B Corporations and “Benefit Corporations,” owned by private capital but committing to serve social ends. In these forms of enterprise, accountability is built into their DNA, and it’s working.
The US is home to over 64,000 cooperatives; and worldwide total sales of co-ops come to about $3 trillion, a sum equal to the total equity ownership of the five global tech giants: Apple, Google, Microsoft, Amazon, and Facebook. Globally, 10 percent of those employed work for a co-op.
Also, contributing to a healthy market economy are publicly owned entities, not held by private corporations. Of the 3,175 US electric utilities, about 63 percent are publicly owned, and 29 percent are rural electric cooperatives.
900 electric cooperatives provide electricity to more than half of our nation’s landmass in forty-seven states, and their customers typically pay less: On average, US public power customers pay rates 6.9 percent lower than paid by those of investor-owned utilities.
Surprisingly, in the red state of Nebraska, all electricity is supplied by cooperatives and public utilities.
Another example of a competitive, publicly owned enterprise is the Bank of North Dakota, founded nearly 100 years ago. Mainly, it serves the state’s financial firms and state agencies, but it also helps citizens directly by serving those without access to private banking.
Yet another approach is community ownership, businesses financed solely by locals. For example, in Walsh, Colorado, population 600, a community-owned grocery store saves people a 40-mile roundtrip drive to the nearest supermarket. Community ownership is not unique to the US. The UK is home to a couple dozen towns with community owned stores, including pubs!
And “B” and “Benefit Corporations”? The first is a company certified as having positive social impact— on employees, customers, the planet. Scores are published for the public to see. Currently, almost 3,000 US companies are B Corp-accredited across 150 industries. A Benefit Corporation also commits to serving broad, social betterment but is not independently certified.
A vibrant market economy, welcoming all these forms of ownership, needs a polity creating values boundaries in which it operates. As noted, Warren made this point strongly. A “fair market,” as opposed to the fictional “free market,” requires a democracy enforcing rules already on the books—those, for example, preventing monopoly and protecting health and safety—and creating new rules as needed.
If “capitalism” is inaccurate, what term does best capture the goal of such a vibrant, fair market economy? One with more accountable forms of ownership and protected from private, monopoly power or bureaucratic overreach?
“Socialism” can mislead because it’s often equated with top-down government control.
So, I vote for “economic democracy” enabling a “fair market”.
It suggests a market economy promoting and protecting life—human and otherwise—because it is accountable to promoting “general welfare.” After all, that is what our constitution’s preamble established as a goal of our new nation.
And to have such an economy requires accountable political democracy, answering to us, not to big donors. Fortunately, a bold and welcoming Democracy Movement is emerging today to achieve just that.
So, let’s drop the dead-end debate of capitalism versus socialism and focus on choosing terms that capture what we really mean—an open, fair, and accountable market essential to real democracy. Thank you, Sen. Elizabeth Warren, for your courage in opening this dialogue.