Ownership Matters|Issue 25
What We Saw in Morganton; Restakis in Depth; the EO Transfers Funding Hole
- Editorial: Four Ways to View The Industrial Commons
- Interview: John Restakis (part 1), Unpacking the Partner State
- Commentary: The Need for Equity Funds
- Books: Jorge Santiago’s Political Solidarity Economy
- You Should Be Reading the Main St. Journal
- Let’s Talk!
- Remaking the Economy, May 5: Closing the Racial Wealth Gap
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share this segment by right‑clicking icon to copy linkFour Ways to Look at The Industrial Commons
I’ve not yet been to Mondragon, nor have I visited the dense co-op scene in Italy’s Emilia Romagna region. But I’ve come about as close as you can get without leaving the continental U.S.
Earlier this week I joined a group from the Francesco Collaborative visiting textile country in western North Carolina. We spent two days in Morganton (“the gateway to Appalachia”) at the site of The Industrial Commons (TIC), where cooperativism, the green economy, and inclusion have been taken to a remarkable level.
What we saw at TIC could be described in several different ways. Here are four:
1. As an emerging regional economic ecosystem and supply chain
The Industrial Commons’ list of sponsored projects includes the Carolina Textile District, a resource hub and a community of manufacturers. Within a 75-mile radius, the CTD comprises 25 participating textile mills, employing 2,500 workers. Its services include industrial sewing programs, help with product development, testing / certification, and design. The vision here is to help recover and renew one of western North Carolina’s legacy industries.
With a staff of 25 and a $3 million annual budget, TIC is also the funder and incubator of worker co-ops and social enterprises employing over 100 workers: Opportunity Threads, Material Return, Good Books, Collection, TOSS Studio, with more in development.
2. As an experiment in the green and circular economy
With textile manufacturing accounting for 12% of global carbon emissions, that’s a lot of textile waste headed for landfills. One powerful response is the model of “custom circularity” offered by Material Return, a TIC member co-op founded in 2017. The circular process involves collecting and custom sorting of textile waste, processing it, spinning it into yarn, and turning it into fabric with which their partners in the Carolina Textile District create finished products.
3. As a connected group of liberatory and humanizing workplaces
Through a mix of open book management, worker committees, and a coaching supervision program, TIC’s enterprises achieve a high degree of transparency and participation. With a large Guatemalan Mayan population in Morganton, a high proportion of worker-owners are from that community, as well as other communities of color. The workers’ sense of being part of something unusual in their town comes through. (When asked by a member of our group why he felt loyal to his co-op, one worker responded, “It’s just my FOMO — these businesses are going places and I don’t want to miss out!”)
4. As a vision of a future social economy
In their quest to root local prosperity and for the long-term, TIC’s plans include developing both land and housing owned by workers, social co-ops, a dedicated worker training space, and a community makerspace, to offer only a partial list.
Ultimately, the TIC vision is to become “the gold standard for our work on defining, promoting and living out environmental and human rights standards for the U.S. textile industry.”
If you haven’t yet, we hope you’ll check out the conversation with Molly Hemstreet, co-director at The Industrial Commons, that we ran in January. The basic principle of cooperative growth, as she discusses it: “Build deeper.”
We recommend too the beautifully produced 11-minute video TIC released last year, a way to see the work in action and hear community members talk about its impact in their own words.
share this segment by right‑clicking icon to copy linkUnpacking the “Partner State”
A Conversation with John Restakis about Civilizing the State (Part One)
Júlia Martins Rodrigues
After almost two decades as the executive director of the BC Co-op Association and a stint as executive director of Community Evolution Foundation, John Restakis currently dedicates his time as a lecturer in Alternative Economies for Social Transformation at the University of Victoria, and to community economic development in Vancouver. He is the author of Humanizing the Economy: Co-operatives in the Age of Capital (2010) and a co-founder of the Synergia Institute.
In our previous issue, Ownership Matters published a review of John Restakis’ Civilizing the State: Reclaiming Politics for the Common Good (2021). Here, we have invited the author to join us and asked him to expand on some of the critical aspects of his conception of the Partner State concept.
We live in an age of extremes. We witnessed that during the invasion of the Capitol last year, which you described in the introduction to your new book as one of the moments defining an epoch. You also pointed out that “the empire of capital” is the driving force behind the great dichotomies of our time, including the abyss between “the upper world of wealth and global civil society.” Tell us more about how you see the potential of the Partner State to repair this abyss.
I start with what I refer to as the crisis of legitimacy of the state and the growing disaffection and mistrust that populations have with their governments and how nation-states are governed worldwide. It’s not just a European phenomenon. It’s happening everywhere.
We have a state of disaffection and mistrust, without all the answers about what an alternative would be. We need a new form of governance and a new form of state to deal with this problem. What I propose is this idea of the Partner State.
The only way government or a state can establish trust with the citizenry is if the citizenry believes that the state or the government actually reflects and represents their interests, priorities, and values. If we do not have a fundamental reidentification with a state with a new set of values and priorities, the problem does not disappear.
We need a regime change: the Partner State is a different form of governance, democratizing the state and formally aligning state power with an empowered civil society. The Partner State reflects the values of cooperation, mutualism, common welfare, and the ability of individuals and democratic civil organizations to be directly involved in the economy.
In your book, you suggest a transition to economic democracy. For example, you say “enterprises over a certain size controlling more than a maximum allowable percentage of a market would have to divest and subdivide into separate enterprises.” Could you expand on how we can gradually transition towards economic democracy without a complete revolutionary break with the current system?
In countries like the U.S. or France, where there is capitalist liberal democracy, a new government or regime could perform changes in the legislation to limit the size of corporations — this has already happened in the past. In the 1920s–1930s, the U.S. government passed antitrust laws that limited the size of corporations. It is the same reason why you would consider a similar legislation today. In fact, some of the bills have been drafted today in the United States, for example, to control the size and the power of social media corporations like Facebook or Google. Legislative change is a fairly conventional way of dealing with the monopoly power in the markets in capitalist economies. Therefore, the problem is not concerning what the solution might look like but is rather a political issue — an issue of political will.
In other words, there isn’t enough political power either in government or in civil society to compel the government to pass this kind of legislation. We need political constellations in place that provide the impetus to pass legislation limiting the size of corporations; ensuring that corporations operate within a social mandate or a social contract; directing them to provide a living wage to their workers; allowing collective bargaining; ensuring transparent policies that address the issues of climate change and environmental responsibility. All these tools are available to us, but how do we mobilize the political power to implement these ideas?
We need a different framework than the free market model, where the market and capitalists determine who gets what. Neither is it the state centrally planning the economy. The Partner State is this new ideological foundation for a healthier economy and society. Within the economic democracy framework, the Partner State promotes social values and provides needed services to people, embodying cooperation, reciprocity, and mutuality.
share this segment by right‑clicking icon to copy linkEquity Funds Needed to Further Worker-to-Owner Buyouts
Bruce Dobb and Tomás Durán
The silver tsunami has begun. More and more business owners from the Baby Boom generation are looking to sell their businesses and retire. Among America’s small manufacturers, for example, 125,000 business owners are on the cusp of retirement. Those businesses represent millions of family-wage jobs that could be lost forever.
With so many business owners looking to sell, it’s an opportune moment for employee buyouts. However, when employees are competing with corporate or private equity buyers, they often lose the deal because they don’t have ready cash for a down payment. That cash is essential for accessing the Small Business Administration (SBA)-backed loans that are used for about 75 percent of small business ownership transitions.
In a typical example, our organization, Concerned Capital, recently worked with a family-owned medical supplies packing and shipping company in the metropolitan DC area. The couple who owned the business, which had about $5 million in revenue, wanted to sell it to the employees. Multiple social investors — a CDFI, a nonprofit, and a social impact fund — were prepared to loan the employees the money to buy the business, but the employees needed to raise $150,000 in equity in order to access the loans. While the employees searched for the cash, a rival company bought the firm and closed in two weeks.
We run into this challenge over and over again. The worker-to-owner financing ecosystem has a significant credit gap: equity financing. What’s needed is an equity vehicle that fits snuggly with existing SBA regulations, providing the 10 percent cash down payment on a deal otherwise financed through debt. We believe, along with our partners at the Democracy at Work Institute, that states can create equity funds to satisfy this need using the State Small Business Credit Initiative.
In the last several years, an explosion of debt offerings have moderately increased transitions to employee ownership. Some of this growth is a direct result of the Main Street Employee Ownership Act of 2018, which resulted in the SBA adopting programs and rules designed to assist with Employee Stock Ownership Plans (ESOPs) and worker-owned cooperative transitions. Impact investment groups, community development finance institutions (CDFIs), and a range of “social benefit” lenders offer a wide range of debt instruments for worker-to-owner deals, including subordinate debt and very low interest rate loans. With greater access to equity, these debt offerings could be leveraged more effectively and the pace of employee-ownership transitions significantly increased.
share this segment by right‑clicking icon to copy linkThe Cosmovision We Need
Political Solidarity Economy (2021) by Jorge Santiago
An importance voice from the global majority, Jorge Santiago is a native of a key landscape in the birth of the solidarity economy movement in the 1990s — the state of Chiapas, Mexico. This Mayan region contains 4.2 million inhabitants from many different ethnic groups, including the Afrodescendants.
Born in 1943, Santiago first set out to be a priest, spending four years in Rome studying theology before the impact of neoliberal forces on his home region pulled him out of the church and into movement building.
He joined DESMI (Desarollo Económico y Social de los Mexicanos Indígenas) in 1974 and spent the next 34 years helping develop alternative economic strategies in over 200 indigenous communities in Chiapas.
His new book has the feel of a first-hand report on the intertwined stories of the rise of the solidarity economy and the movement for indigenous rights, perhaps most famously championed by the Zapatista Army of National Liberation.
The economy Santiago describes is not only an alternative to neoliberal capitalism but something closer to a cosmovision, i.e., the conception that indigenous peoples have of the physical and spiritual world and the environment in which they conduct their lives. It is also a global vision of mutual support, land, knowledge, and an understanding of the power of orality.
Thus we’re speaking here of the defense and care of the earth and indigenous territories within the framework of food sovereignty and solidarity economics. As the author puts it, there is no agroecology without a political solidarity economy.
The book’s themes are: seven ways of understanding solidarity; the solidarity economy in Chiapas; economy and currency; Zapatista autonomy as an example; and the work of DESMI.
The foundation of the solidarity economy, the author argues, is in networks and their collective strength through participation in the whole. We aim to unite all our experiences in order to build through practice and collective learning.
The movement, Santiago, says, is not about putting the government on trial but about taking ownership over governance and with a transnational approach.
Thousand Currents, three decades a supporting partner of DESMI, presents on its site a short bio of Jorge Santiago with links to further info, plus a video interview well worth the under 20 minutes’ viewing time (Spanish with English subtitles).
In Case You Missed It . . .
From our third issue’s conversation with Camille Kerr about ChiFresh Kitchen:
The reason we focus on formerly incarcerated people is not because there’s anything innately good or bad about them. It’s just because that’s where the barriers are. These are beautiful humans that are facing overwhelming barriers. So let’s get rid of those.
They’re people, they’re just people. Who’ve dealt with shit, you know? I’m really close with some team members, a little less close with others. Some of us have personality stuff in common, and each of us has different talents. All of our members had a hard, hard childhood. If I grew up in that situation, I’d be in exactly the same place. It’s just circumstances.
share this segment by right‑clicking icon to copy linkYou Want the Main (not the Wall ) Street Journal
Somebody has finally created a newsletter for folks who want “the latest news and notes about local investing and community capital” — and it’s free.
The Main Street Journal is the idea of Michael Shuman, the guy we think of as having invented community economics, although that may be overstating it a bit. Michael is the author of Put Your Money Where Your Life Is, The Local Economy Solution, and Local Dollars, Local Sense. He is credited with being one of the architects of the 2012 JOBS Act and dozens of state laws overhauling securities regulation of crowdfunding.
His new biweekly newsletter is an expert mix of editorial and curated links. If you really get fired up to help move money from Wall Street back into Main Street, there’s a network of Main Street Champions you can join. A few recent topics in the MSJ include investing in Ukraine, Philadelphia’s declaration of banking independence, and how to solarize your neighborhood. Recommended!
The Main Street Journal is currently being published at Substack. Go check it out — and subscribe!
Subscribed readers should keep an eye on their inboxes for word about our next Ownership Matters Reader Gathering — not this month, but resuming on regular pattern in the third week of May.
Conversation doesn’t have to wait until we can get together live, though! Join us in the Editor / Reader Circle, and add your thoughts to Elias and Júlia’s short posts there about what you’re reading here.
If you’re a subscriber and haven’t gotten around to checking out the Circle space, simply sign up and we’ll add you. (If you’re reading this but not yet subscribed to Ownership Matters, do that first!)
And don’t hesitate just to write us a note directly. Editorial@ownershipmatters.net is good for comments and questions alike.
Upcoming : Thursday, May 5
share this segment by right‑clicking icon to copy linkClosing the Racial Wealth Gap
A Nonprofit Quarterly Remaking the Economy Event
This event, jointly moderated by Steve Dubb of NPQ and Miriam Axel-Lute of Shelterforce, brings together four field leaders to discuss key questions regarding economic justice, racial justice, and strategic approach to closing the wealth gap.
The panelists are:
- Gary Cunningham, president and CEO of Prosperity Now, a national racial and economic justice nonprofit headquartered in Washington, DC. Prosperity Now is invested in transforming our economy to work for everyone.
- Jeremie Greer, co-founder and co-executive director of Liberation in a Generation, an organization incubated by PolicyLink, which is building the power of people of color to totally transform the economy.
- john a. powell, director of the Othering & Belonging Institute, and professor of Law, African American Studies, and Ethnic Studies at the University of California, Berkeley.
- Anne Price, president of the Insight Center for Community Economic Development, which strives to shift power and agency in economic policy by centering those closest to the problems in developing solutions.
This event is scheduled for 2 PM ET, Thursday, May 5, and will be recorded. Sign up at the NPQ site to attend or receive further information.
Coming in Issue 26, May 3
- Interview: Synergia Cooperative Institute co-founder John Restakis, part 2
- Books: Rebecca Solnit’s Orwell’s Roses
Article ideas? Submissions? Helpful suggestions?
Contact the editor: email@example.com.
- Elias Crim, Editor
founder, Solidarity Hall; former business journalist and publishing consultant
- Júlia Martins Rodrigues, Contributing Editor
attorney (Brazil); visiting scholar, law, University of Colorado Boulder; PhD candidate, civil and constitutional law, University of Camerino
- Daniel Fireside, Contributing Editor
founder, Uncommon Capital Solutions; board member, Namaste Solar; capital coordinator, Downtown Crenshaw Rising
- Zoe Crim, Editorial Assistant
B.A., linguistics, Indiana University Bloomington; co-founder Fair Trade group
- Paul Bowman, Design / Content Mgr.
Disclaimer: The content of Ownership Matters is for informational purposes only. Such information should not be construed as legal, tax, investment, financial, or other advice. Nothing contained in these materials constitutes a solicitation, recommendation, or offer to buy, or a solicitation of an offer to sell, any securities. Subscribers / readers agree not to hold the authors, their affiliates or any third party service provider liable for any possible claim for damages arising from any decision made based on information published here.