Editorial

share this segment by right‑clicking icon to copy linkPitching Tents in a Hurricane

Elias Crim

I want to share some numbers relating to business startups I recently came across for our mutual consideration here.

In 2015, according to a recent New York Times article, 80 tech startups were each worth more than $1 billion. Today? It’s more than 900.

To describe this environment, the Times piece uses the words “froth,” “crazy,” “frenzy.” Mostly we can blame the pandemic for the bonanza in tech-enabled business ideas, especially in the sectors of food delivery, remote-work, and telehealth. As a broader indicator of the times, Apple’s valuation has now topped $3 trillion.

For startup folks, we have even entered a period of the “reverse pitch.” These are unsolicited emails containing pitch decks of research from investors ready to write big checks to founders. The Times article quotes a founder who received pitch videos featuring celebrities the funders hired to make their case. Founders can start raising money on a Friday afternoon and have a deal closed by Sunday night.

In this environment, U.S. startups raised $330 billion last year, nearly double the record number for 2020. The value of startup exits — whether as a sale or a public offering — spiked to $774 billion, according to PitchBook.

Here’s another number: $400 billion. That’s the combined valuation of all companies that passed through the Y Combinator accelerator over the last 16 years. It invested in Airbnb, Dropbox, DoorDash, Stripe, Reddit, and more now-familiar names.

What’s changed in recent years is both the tempo of development for these deals — from years to mere months — and the equity situation for founders. If you can manage to retain 1% equity in your billion-dollar accelerated unicorn startup, your brilliant idea makes you worth . . . a paltry $10 million.

One Web3 response to this situation is called Blockzero Labs, an accelerator structured as a DAO and thus accepts tokens from the projects it accelerates. It even issues its own token, XIO, and has distributed 100% of the supply to its community of 4,000. (For more on DAOs, see our note elsewhere in the issue on their promise for co‑op businesses.)

Capital deployed on this scale and with this kind of concentration is frankly daunting when we compare it with the size and relative fragility of the solidarity economy and shared ownership movements.

We are tempted to feel as though we are pitching tents in the midst of a Category 7 hurricane. But we simply can’t wait for the storm to pass. Stay steady. 

share this segment by right‑clicking icon to copy linkCultivating a Worker-Powered Cooperative Ecosystem in Western NC

A Conversation with The Industrial Commons’ Molly Hemstreet

Elias Crim

Molly Hemstreet is the founder and general manager of Opportunity Threads, the largest U.S.-based, worker-owned cut-and-sew facility. In 2015, she co-founded The Industrial Commons, a nonprofit dedicated to teaching democratic workplace principles and worker-ownership. In 2013, she co-founded the Carolina Textile District, a network of textile mills that works together to respond to demand for sustainably produced U.S. goods and builds a platform for worker participation.

Books

share this segment by right‑clicking icon to copy linkBringing the Economy in for a Landing

Katherine Trebeck and Jeremy Williams, The Economics of Arrival

The subtitle of this excellent book is “Ideas for a Grownup Economy,” by which the authors mean an economy whose maturity is grounded in a sense of “enough.” Improvement, not enlargement.

As we rediscover the difference between the economy and what used to be referred to as political economy (a broader term meaning socio-economic reality), it’s easy to notice the search for new stories, images, metaphors. Some striking new frameworks have been offered in recent years: the economy as a doughnut (Kate Raworth), ideas of economic “gardening,” a “moonshot” economy (Mariana Mazzucato), the circular economy, etc.

Authors Trebeck and Williams recall the ideas of W. W. Rostow in his infamous Stages of Economic Growth — a kind of 1960s cookbook for American economic domination in the world — that the goal of “developing countries” was to reach “takeoff.” This aeronautical metaphor has only begun to be questioned in the last generation, given that no one seems to know when our economies are supposed to finally land somewhere. So when, the authors ask here, do we arrive at home at last?

In terms of wealth, many countries have already arrived and can make themselves at home having reached a state of adequacy and ample sufficiency. Growth for its own sake is no longer necessary nor beneficial.

Consider that between 1950 and 2010, global GDP grew 10X, the number of cars in the world has passed the 1 billion mark, international tourism went from 50 million visits / year to over 900 million, and the number of phone subscriptions is now over 6 billion. We have also seen the rise of “voiceless” growth — without improvement in democracy — and “rootless” growth — coming at the expense of cultural identity or a loss of minority identity.

Growth, the authors point out, has also worked as a way to avoid the topic of redistribution. Instead we have been served fake redistribution in the form of greater access to consumer credit or “privatized Keynesianism using fake wealth.”

What is now needed is an economy that values true sharing and “predistribution” — i.e., the will to avoid inequality at the outset by expanding asset ownership via cooperative businesses, neighborhood trusts, regional energy, benefit corporations, and social enterprises.

Over-development is thus the cage which we have built for ourselves instead of realizing that we possess the means for life but have forgotten the art of life.

Where might we find examples of economies which have arrived? The authors cite two, even if less than perfect: Japan and Costa Rica. It’s fascinating that many now view Japan’s “lost two decades” of little or no growth as a post-growth exemplar. This period of low growth, they argue, demonstrated the redundancy of growth in a mature economy, one which continued to operate at a world-class level.

Costa Rica is a notable over-performer on the Social Progress Index, a country with high measures of wellbeing coupled with low resource and energy consumption.

In fact, the movement away from our historical focus on GDP as a proxy for progress seems to be accelerating. The authors list a number of alternative measures, including the Genuine Progress Indicator (now used by the states of Vermont and Maryland as a planning tool), the Happy Planet Index (New Economic Foundation), the U.N.’s Human Development Index, and the OECD Better Life Index, among others.

The book is a compendium of programs and initiatives which share a focus on a wider definition of wealth, to include health, relationships, meaningful work, participation in society. Less a collection of government programs than many disparate signs of a coming societal shift. It cannot arrive too soon. 

Commentary

share this segment by right‑clicking icon to copy linkAre You Financing a Genocide?

A Uighur Expatriate Urges Us to Reflect

Júlia Martins Rodrigues

The high-security re-education camps built in the far-west Chinese region of Xinjiang for the Uighur people systematically meet every definition of a genocide including claims of indoctrination, sexual abuse, forced sterilization, organ-harvesting practices, and enslavement under the pretense of suppressing religious extremism and terrorism.

We know the authoritarian Chinese government has a history of denying political actions and fundamental rights to its citizens, repudiating the continuous march democracy has followed along a non-linear pathway since its first draft in the polis of Athens. However, what the Uighur genocide exposes has even more to say about our own democracies than its mere absence on Chinese soil. The Greeks’ greatest invention has not fully penetrated the full human social fabric, particularly into the economic sphere, even in societies that claim to adopt a democratic rule of law at the heart of their constitutions. Under hierarchical and authoritarian institutional designs, the current permissiveness in the merciless performance of global economic oligopolies reveals the mismatch between the fundamental values nurtured in the political sphere and the power dynamics experienced in the empire of global finance.

Not only do businesses headquartered in democratic systems consistently fail to uplift democratic rights within their workplace, but they often benefit from human rights violations perpetrated overseas by dictatorships.

One of the worst examples of this trend is the lobbying effort of U.S.-based corporations against the Uighur Chinese labor bill introduced in the U.S. Congress last year. Famous brands like Nike and Coca-Cola, as well as contractors connected to Apple, Microsoft, Google — the faces of our consumer society — added to the outrageous list reported by importing goods made through Uighur mass forced labor in detention camps. This time, despite the corporations’ cynical efforts, the U.S. Department of State expressly acknowledged the ongoing crimes against humanity over Muslim Uighurs in 2021 Then the Uyghur Forced Labor Prevention Act passed in the Senate and was endorsed in House banning imports from China over slave labor in early December 2021. Just before Christmas that year, President Biden signed the commitment to combating forced labor Perhaps it is still too early to claim victory when most countries have not moved in the same direction, allowing an avalanche of products made in China without due rigor regarding the nature of the labor used. Moreover, the new law might face serious enforcement issues on the cusp of capitalism precarity feeding our hyper-consumption society.

The genocide and indoctrination of an ethnic minority in Central Asia is one more per se proof of the non-linear nature of democracy in humanity’s development. Combined with the international economic interests supporting the repression of the Uighur people, democracy has been put on its deathbed in recent years by the global system of corporate capitalism. Even self-regarded communist states like China find capitalism the pathway towards market dominance, feeding Western companies cheap labor and goods. China has been able to exploit the profit-above-all mindset to flood the world’s shelves with their production creating a general dependence on their power. In practice, the Xinjiang province’s cotton production and oil reserves serving the global market has benefitted from the operations of the concentration camps, through ethnic and religious targeting, despite the (still scarce) protests coming from the international community.

Xinjiang province, the ancient and formerly independent home of the vibrant Uighur culture, has experienced harsh dispute over natural resources, given its strategic localization in the heart of Asia. The government’s campaign of cultural marginalization and persecution, artificially imposing Chinese ethnicity onto a people who are closest to the Turks in their language and religion, has been instrumental in weakening the Uighurs’ local presence in state-run operations. The tension has been escalating since 2009 when major protests against exploitation and rampant inequality arose in the region. Within less than a decade, the conflict led to the mass incarceration of millions of Uighurs. Despite the lack of reliable data, the current persecution seems to be on an even broader scale than that recorded against the Jewish people during Nazism, but the joint international response that ended European fascism has not yet been as strong in this Chinese case.

During my doctoral studies in Europe, I had the pleasure of meeting my dear friend Dr. Mamat who was my neighbor at the time and currently works as a physics researcher based in France. He is a Uighur expatriate vocal about the genocide inflicted against his people and agreed to grant me an interview despite real concerns of retaliation. The Chinese government’s restrictions on communication obstruct his contact with loved ones, despite the fact he knows his brother, cousins, and friends have been arrested without the due process of law or any further explanation. Terror has taken overcome most of these Uighur peasant families while the international community remains quiet and dumb.