Editorial

share this segment by right‑clicking icon to copy linkThis Time Will Be Different

Elias Crim

If you read this newsletter, you’ve probably already heard the news: we have finally awakened the elephant. Meaning, employee ownership (EO) has caught the attention of the big world of private equity (PE).

Witness the April launch of Ownership Works, a consortium of 60 orgs — notable among them private equity giant KKR — which proposes to create $20 billion in wealth for workers over ten years.

Which led Marjorie Kelly and Karen Kahn to ask, writing at Fifty by Fifty, “Is Private Equity about to Co-opt Employee Ownership?” To answer the question, they compiled an excellent series of short essays, along with Kelly and Kahn’s related Fast Company article. A big door is opening here.

You could describe it as a nearly $6 trillion dollar door into an industry (here’s an interesting overview, and here’s another) where top execs make over $100 million annually. And the corporate taxes are low (the famous “carried interest loophole”).

And we should remember that private equity isn’t new: it has a history which Kelly and Kahn invoke in the title of their article, “Are the Barbarians at the Gate?” For you younger readers, it’s a reference to a famous business book from 1989 (and a TV film from 1993) which captured the frat party atmosphere of the leveraged buyout boom of the 1980s through the case of RJR Nabisco, an epic takeover battle eventually won by KKR. (Wikipedia: “. . . almost every major Wall Street firm involved in M & A launched frenzied, literal last-minute bids in a fog of incomplete or misleading information.”)

So how has KKR partner Pete Stavros attempted to operate differently in recent years from his firm’s earlier track record? According to a Reuters article, his decade of work on increasing employee ownership has impacted over 45,000 non-management employees across 25 KKR-backed companies.

Of course, that won’t help the former employees of KKR’s over-leveraged list: Toys R Us, Hertz, Payless Shoes, J. Crew.

So what can Stavros accomplish here? Are greater amounts of shared equity an attractive way for KKR to simply make more money? If the standard 3- to 5-year exit does not change in this strategy, then no actual EO is created and no employees have a say in any outcomes. Possibly Ownership Works is planning to work from a new equity model — but we don’t know that as yet.

While we’re waiting for further developments, we might note the Tale of Two Guitar Companies — the buyout of Gibson Guitars with KKR vs. the 100% EO trust managed by the Canadian group Social Capital Partners, as described last year in Corporate Knights magazine.

And in the meanwhile, we should deal with this new breed of PE folks just like their own big investors do — by first asking a lot of questions. 

share this segment by right‑clicking icon to copy linkShifting Power in Chicago

A Conversation with Mike Strode of the Kola Nut Collaborative and Open Collective

Elias Crim

Mike Strode, a program officer with the Open Collective, is a writer, cyclist, IT consultant, facilitator, and solidarity economy organizer residing in southeast Chicago whose community engagement work has included ride leadership with the Chicago chapter of Red, Bike & Green; editorial and archival oversight for Fultonia; and co-facilitation of Cooperation for Liberation Study & Working Group. He is founding coordinator of the Kola Nut Collaborative, a time-based service and skills trading platform which promotes timebanking throughout Chicago. He also serves as a current board member for Dill Pickle Food Co-op.

Commentary

share this segment by right‑clicking icon to copy linkFinding Solidarity on Maui

Kipuka Olowalu’s Quest for a New Kind of Tourism on the Island

Júlia Martins Rodrigues

Our desire to spend time away from home for leisure drives an entire economic sector. The tourism industry is an umbrella that carries multiple other industries by including all the visitors’ direct or indirect activities at their destination, such as lodging, transport, meals, and local attractions. Even though tourism history and cultural importance began long before social media and globalization, air travel became more widely accessible, and online life has created a growing culture of pleasure-seekers, emphasizing trendy destinations and experiences.

Tourist arrivals in popular locations have increasingly become a double-edged sword regarding local impact. On the one hand, tourism triggers major foreign exchange and employment generation, injecting essential resources into the local economy. On the other hand, the excessive focus on tourism without appropriate policies protecting the local communities and natural resources has created tensions and clashes amongst visitors and domestic life in overcrowded tourist destinations.

With less than 50 thousand residents and more than 23 million tourists a year, Venice policymakers are pushing for paid reservations to enter the famous Italian city. Residents in tourism hotspots, such as New York, Paris, and Barcelona, have long suffered the effect of tourism on the housing market, facing the process of urban gentrification. To accommodate the volume of visitors, the construction of luxurious resorts in protected areas of Bahia, Brazil, especially in places of sea turtle reproduction, has left true environmental crimes behind.

In Maui, Hawaii, the story is not different. Its unique biodiversity and natural beauty in the core of the Pacific ocean attract visitors from around the world. Many tourists step into the island hoping to drink coconut water on the beach and taste the island’s flavors at local fruit stands, watching the famous rainbow over the mountains.

Once in the resort area in Lahaina — the past royal capital of Maui — the actual experience vastly contrasts with the most common expectations. Visitors find obtrusive buildings over ten stories high blocking any sight of the coast, their lawns replacing the beach sand; “private property” signs everywhere; a Louis Vuitton store and other luxurious brands barely a step from the famous Black Rock beach; grayish (i.e., unhealthy) coral reefs; landscaping instead of nature; an avalanche of made-in-China souvenirs and few local crafts.

The island’s Polynesian roots often supply names for the local resorts and live entertainment, but most of it felt like plastic and cultural appropriation at the service of capital rather than legitimate value and respect to the local communities. That entire side of Maui is a loud scene of overdevelopment and savage capitalism, overshadowing the natural beauty and cultural commonwealth that should sustain the island.

Books

share this segment by right‑clicking icon to copy linkOther Worlds Are Possible

Pluriverse: A Post-Development Dictionary (2019), eds. Ashish Kothari, Ariel Salleh, Arturo Escobar, Federico Demaria, and Alberto Acosta

Elias Crim

In the second half of the twentieth century, writes Wolfgang Sachs in the foreword to this “global tapestry of alternatives,” the idea of development — and its partner concept, “underdevelopment” — prepared the path for Western imperial power around the world. It proved to be a cul-de-sac, “the consequences of which would hit us in the form of injustice, cultural turmoil, and ecological decline.” (See contributing editor Julia Martins Rodrigues’ commentary on this same topic in our previous issue.)

Sachs argues that three narratives are fueling a new fear of the future: fortress thinking (neo-nationalism’s dream of restoring a glorious past), globalism (the deregulated, free trade world), and solidarity (cosmopolitan localism).

The third narrative includes human rights — collective and individual — and ecological principles. Market forces are merely a means to an end. The herald of this solidarity, Sachs suggests, is Pope Francis, especially in the Laudato Si’ encyclical (“That is why the time has come to accept degrowth in some parts of the world, in order to provide resources for other places to experience healthy growth,” ¶ 193).

One good definition of the pluriverse is the Zapatistas’ phrase “a world where many worlds fit.” The notion of the pluriverse questions the very concept of universality that is central to Eurocentric modernity. It also underpins an ideal of communality present in today’s global movements towards communing or la comunalidad.

This dictionary — actually a collection of essays prefacing a dazzling compendium of worldviews and practices, each only a couple of pages in length — consists of three sections. The first is a group of commentaries from leading scholar-activists from each continent reflecting on the political urgency of reassessing development activities.

The second section — Universalizing the Earth: Reformist Solutions — looks at and critiques a range of innovations, mostly from the global North and promoted as progressive solutions. The latter range from “climate-smart agriculture” and “earth system governance” to “neo-extractivism,” “smart cities,” and “transhumanism.”

The final section is called The People’s Pluriverse: Transformative Initiatives. This collection of short profiles is indeed a tapestry of alternatives and cosmovisions. They tend to link ancestral and contemporary knowledge in a fascinating way.

Some of these visions and practices are already known in activist and academic cirles: buen vivir, a culture of life with various names throughout South America; ubuntu, emphasizing the southern African value of human mutuality; swaraj from India, centered on self-reliance and self-governance.

A sampling of other entries in this section: Agaciro, Agdals, Agroecology, Alternative Currencies, Buddhism and Wisdom-Based Compassion, Chinese Religions, Christian Eco-Theology, Community Economies, Deep Ecology, Degrowth, Direct Democracy, Ecovillages, Gift Economy, Hurai, Ibadism, Islamic Ethics, Judaic Tikkun Olam, Latin American and Caribbean Feminisms, Nature Rights, Sea Ontologies, Tao Worldview, and Worker-Led Production.