The Next System
The next System? Two questions present at the very start: a) what’s wrong with the present social-economic System? and b) who celebrates and who suffers under its despondency? [Please note I did not say social-political-economic System. The political system we live under is supposedly democracy, but there is no equivalence of capitalism and democracy, as many would insist there is.]
Most people say, “Capitalism may not be perfect, but it’s not as bad as any other that has come along — communism, feudalism, absolute monarchy,….” Many just shrug their shoulders with little quibble, “What can you do? It’s the System.”
Others recognize the deficiencies and inequities and say, “Regulate or, at least, mitigate the worst burdens of the System, and learn to live with the beast.” A few, further to the left politically, are ready to fight, “We must confront and challenge the System.” They propose tough controls such as the re-enactment of the Glass Steagall Act which had separated commercial, savings, and investment functions of banks since 1933, until 1999 when it was replaced by the Financial Services Modernization Act.
In the 21st century, new hydra-headed banks under the leadership of go-go banksters ceased to be so conservative and stuffy. They soon expanded investments from futures and puts & calls into derivatives, those imaginary “investments” such as swaps, straddles, strangles, iron condors, and bear call spreads. The largest financial institutions — CitiGroup, Bank of America, JP Morgan Chase, Morgan Stanley, Wells Fargo, and (not least) Goldman Sachs — all had aggressive traders who dealt in derivatives. [That’s “dealt” as in a gambling den.] These banks became known as the Six Sisters. [Repeat rapidly: Six Sisters. There you have it — a reality check of these Big Banks.]
Those who are ready to confront and replace Capitalism point to the many inequities, dishonesties, and outright lies of government officials who profess fealty to democracy and the Constitution. The front line challengers to Capitalism could easily add several more: the erosion of civil rights and civil liberties; the trampling on First Amendment rights [freedom of speech, freedom of the press, freedom of peaceable assembly, and freedom to petition for the redress of grievances]; the amount of poverty and homelessness in this, the richest of countries in the world; the failure to achieve women’s equality; the injustices and general sense of unfairness in the land.
It is why so many people here and abroad have come up with such colorful names for the present System: Anything-Goes Capitalism, Sauvage Capitalism, Casino Capitalism, and Ring-a-levio Capitalism.
Here’s a short list of matters that need urgent attention:
* CEOs of large corporations make 300 to 400 times the salary of regular workers at their companies.
* The Pentagon budget, $600,000 billion, year after year, largely lines the pockets of the weapons manufacturers (defense contractors).
* The government has failed to audit the Pentagon which admittedly is rife with waste and redundancy.
* Whistle blowers are unprotected, even though they report government waste or illegal action. They are fired, prosecuted, and even jailed, instead of being celebrated.
* Most of our elected officials (public servants) are bought off by way of campaign contributions. They are often “elected” by suppressing the vote of the poor and the young and by outright switching of votes on computerized voting machines provided by private corporations. There is usually no paper record.
* The oil and gas industries routinely receive tax breaks and subsidies (corporate welfare).
* Off shore accounts (often just a PO Box number) are used by corporations and wealthy individuals to avoid taxes.
* Enormous levels of student debt ( $1.2 trillion at last count) are a burden to working class families.
* The illegal wars in Afghanistan and Iraq, and the secret Special Forces operations in Iran have cost more than $2 trillion thus far.
* The illegal bombing of Libya leading to the assassination of Gaddafi was carried out at least partly for the purpose of preventing the establishment of the Gold Dinar as a competitive currency to the Dollar. The result was a failed nation that ended in total anarchy.
* The maintenance of about 800 military bases abroad with their complement of troops and planes, account for over $150 billion every year.
* A modern two-tier criminal justice system treats law breakers in accordance with their needs. One tier is for the rich, imposing fines at most; and another for the not so well to do, prescribes at least prison time. It all costs over two billion dollars a year.
* Many thousands of citizens are not covered by medical insurance, despite the Affordable Care Act (ObamaCare), under which the pharmaceutical industry makes out very well. All the while, the rest of the industrialized world has universal medical coverage.
There we have a baker’s dozen reasons why a different System is needed. With the amount of money represented by those 13 reasons alone, the United States could be the nation of schools and libraries, and the center of intellectual activity — philosophy, literature, medicine and primary preventive medicine, cyber-science, cosmology, cellular and molecular biology research, and let us not forget art, music and poetry. Include, as well, a School of Statecraft and Diplomacy with a department of Peace Studies. The US can be Number One in all the hunan values to which a great civilization can aspire.
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Yet, a financially privileged few tell us that the present System is performing quite well. They point to the stock market averages at record highs. Too, the total value of all the companies represented on the exchanges are setting records, proof positive of the health of the economy. They note that the Big Banks, that were in such dire straights that they needed bailouts, are back to [obscene levels of] profitability. Our industrial monocrop farms, with the help of Monsanto and other chemical companies produce great volumes of grain and other foods on an industrial scale that they can afford to sell cheaply. The CEO of Goldman Sachs, one of the banks that finance such farms (and oil and gas pipelines), says he’s only a banker “doing God’s work.” Their stockholders are deliriously happy, with the price of Goldman Sachs stock at record highs.
But, the privileged few add up to only 1% of the population of the US. Some older folks of the 99% remember when bankers were conservative and staid, dressed with a pocket watch in their vest. Now, such bankers are considered Neanderthals.
How short our memories are; how few remember the sub-prime mortgage bubble, and fewer the dot com bubble of the 1990s or the merger mania of the 1980s. Further back, 17th century Capitalism expressed its sentiments with the tulip bulb lunacy. Bubbles followed by crashes are in the genes of Capitalism.
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Several professional economists and other academics have suggested an alternative System — cooperatives and worker owned companies to replace the private corporations of Capitalism. They give examples of consumer co-ops, worker owned factories and other businesses, co-op banks (credit unions), state owned banks, city owned utilities, family farms joining together to form co-ops, and CSA (consumer sponsored agriculture) farms. Perhaps we should include national, state, and municipal parks, public schools, public libraries, and town squares,
Good models of co-ops on a fairly large scale exist in northern Spain (Mondragon) and in northern and central Italy (Co-op Lombardia, Unico-op Firenze, Emilia Romagna, and several others).
This essay proposes that we need not challenge and actively try to replace the corporate System with a cooperative System. The corporateers will not quietly ride into the sunset, and the corporate mainstream media will not refrain from taking sides in the Capitalism–Cooperative debate. Rather than confront Capitalism directly, we can make an end run around the monster. In fact we already up to the line of scrimmage.
Historically, cooperative enterprises can be traced back to 1228 and cheese makers in Switzerland who organized a producers co-op. In 1498, the first service workers formed a co-op in Scotland. Consumers’ co-ops started in England in 1761. Matters became quite organized in 1844 with the publication of the Rochdale Principles of International Cooperation, so well thought out that they are still used to guide the Co-op movement internationally. Today, Co-ops are strong in Ghana, West Africa where fine chocolate is produced, and in Ethiopia, East Africa where Co-ops produce 75% of the nation’s coffee. In India, 12 million dairy farmers are members of 100,000 Co-ops. In South Korea, most of the fishermen are members of Cooperatives. Co-ops produce the great majority of wind power in Denmark, a nation that is one of the leaders in the development of wind energy.
The US is no laggard in the adoption of the Cooperative model. The National Grange, formed in 1867, is still going strong. Within a half hour drive of my home there are five Grange Halls. They each provide venues for a number of community activities. No one speaks ill of Granges. Everywhere in the nation are credit unions, depositor-member owners, many long-established as well as a flood of young co-ops across the nation.
Today in the era of huge multinational corporations, Co-ops can easily compete on a small production scale and a mid-range scale. With pooled resources of several cooperatives, they can compete with Capitalism on a larger scale. The 350, employee-owned Waitrose grocery stores in the UK, employ 91,000 loyal worker-owners. These retail supermarkets are highly profitable and regularly win awards for excellence, such as: best customer service, best store environment, and my favorite supermarket. By Royal Warrant, Waitrose supplies food, wines and spirits to the Queen and, more recently, to Prince Charles. So much for the argument that worker co-ops are always small enterprises of fewer than ten or so workers-owners.
The large corporations and private banks would have you believe that only they (the Big Banks) can fund really huge projects, and that that co-ops would be hopelessly inadequate. Let us look at the proposed Dakota pipeline (through sacred Indian lands) as an example. Seventeen private banks made direct loans, and 38 banks offered lines of credit. A group of large Credit Unions could handle a project of that financial size. The $3.8 billion wouldn’t scare a consortium of dozen larger Credit Unions, but the 1868 Treaty with the Sioux and the danger to the planet from burning the oil that would be run through the proposed pipeline would be enough reason not even to reply to a phone call from Energy Transfer Partners.
In worker co-ops, salaries of employees are relatively balanced. The more highly paid executives never have salaries more than five to ten times the salaries of the lowest paid workers. Multi-million dollar CEOs are completely unknown. There are no stockholders to receive dividends. Most of the workers at a worker owned business will live in the community and never vote to move the business to another state, let alone to a foreign country. Workers who are stakeholders take pride in their work and do not complain of honest, hard work. As well, they are paid a good amount more than minimal wages. Savings in other cooperative ventures easily outdo private corporations. One of the best examples is Medicare, run by government employees, which uses only about 3% of their total budget for administrative costs. The remainder is to pay medical claims, their basic business. Private insurance companies, in contrast, have administrative costs and shareholder dividends of 15% to 25%.
The naysayers to a Cooperative Economic System say that a Cooperative System would be easy to abuse or to rip-off. They argue that corporations with a single minded focus on profits are well practiced in the art of mergers, and could execute a take-over of a co-op that produced a strong revenue stream. Such a greed-driven corporation might keep the co-op identity and use its new subsidiary as a cash cow or could sell it off to another corporation for a quick profit. The Rochdale Principles of 1844, modernized a little for the 21st Century, would keep everyone honest. To make doubly sure, the National Cooperative Alliance would keep on retainer a few good Italian lawyers, well versed in Italian Co-op Law, which states clearly that 80% or more of any surplus must be re-invested in activities of the Co-op and not given to members or to non-members.
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The US is proud of its tradition of rugged individualism. It is a land known for initiative, entrepreneurship, and self made millionaires, where people have started poor and pulled themselves up by their own bootstraps.
At lower profile, however, there is a long tradition of cooperation and caring. Let us count a few of the ways at the nation’s beginning that are still going strong in many places.
• The new country was largely forests and countryside and less city. Family farms and rural granges were a trademark of the young nation, both still around.
- Barn raisings have a long tradition,— a joint effort by a group of neighbors in counties where small farms are still viable.
- Quilting bees were and are another staple of small towns.
- Choral groups and chamber music groups form spontaneously everywhere. It’s not just barber shop quartets.
- In the arts — printmakers, watercolorists, potters woodworkers, and blacksmiths form organizations.
- Poets find each other in towns and cities and form workshops.
- Farmers’ markets have seen a resurgence in recent years.
- County Fairs are going strong in rural communities, and attract city and suburban folks.
- Pancake breakfasts and potluck dinners are common in rural communities and are well attended.
- Block parties celebrate events and holidays in both towns and cities.
- Every city and many towns have a central square or plaza belonging to the people where citizens may spend a spring afternoon in the outdoors, gather a music group, or bring a soapbox to address a political/social matter.
- Our nation was founded on a shared sense of fairness – no taxation without representation.
- City parks are more to the purpose of an area set aside for people to enjoy the natural world in the midst of concrete & glass with rivers of asphalt. If paved drives cross or circle within a large park, they are often reserved for runners and walkers on weekends. The parks represent The Commons.
- Throughout the nation, there are community service organizations such as Rotary Clubs, Lions Clubs, Elks Lodges, and Masonic Lodges which serve both groups & individuals in need and worthy organizations.
- Town meetings are held in a number of Congressional districts, even in residential neighborhoods of cities.
- Folk dances and square dances are still held everywhere, from community centers to granges to churches.
- Women in local neighborhoods may cooperate in sewing garments for the dowry of an engaged girl. It is an old tradition which still persists.
- Women in local neighborhoods may cooperate in sewing garments for the dowry of an engaged girl. It is an old tradition which still persists.
- Volunteer fire departments today respond to fires in small towns and larger towns, as well.
- Habitat for Humanity volunteers gather building materials and actually construct houses for needy people. The future occupants give their own sweat equity.
- In schools in both cities and towns, PTAs connect parents with each other and with teachers.
- Food banks, soup kitchens, and Thanksgiving dinners for the poor illustrate the American tradition of caring for people in need. That is also true of organizations that collect coats and sweaters for them for cold weather. Some churches will set aside a community room for the homeless of a community in winter.
- Many cities turn vacant lots over to neighborhoods for community gardens, much along the lines of cities in England where the Town Councils allocate allotments for citizens to grow their own produce. Needless to say, there is much cooperation such as the sharing of tools, labor, and experience.
- In the country, many small farms have adopted a CSA (community sponsored agriculture) structure whereby members purchase a share of the farm’s harvest. Each week, the farmer brings whatever vegetables and fruits are ripe that week to an outdoor parking area or indoor community center.
Volunteerism is a tradition in the US — strong evidence of cooperation and caring being inherent in the human spirit. Here are a few typical organizations that encourage volunteerism: the Red Cross, public libraries, hospitals, school classrooms, literacy volunteers, museums, churches & temples, Shalom Communities of the United Methodist Church (open to non-congregants), ASPCAs, local historic societies, the Boy and Girl Scouts, Little League teams and other sports clubs, YM&WCAs and YM&WHAs, consumer food co-ops where members do volunteer work in exchange for food at cost, disease foundations (American Cancer Society, American Diabetic Association, American Heart Association …), National Public Radio stations and PBS TV channels. There are, as well, many categories of NGOs that advocate for the environment, civil rights, civil liberties, scholarship funds, medical/surgical free clinics …. Volunteers are active in all of them.
In the economic sector, in high profile, the US has been known for its individual-centered corporate culture. Examples of free-for-all Capitalism abound throughout — from the robber barons at the turn of the 20th century to vulture capitalists of more recent days.
Yet, at very low profile, US economic life is also cooperative across a wide swath of enterprises. In North Dakota, the State Bank keeps its considerable assets invested almost entirely in-state. Across the US, over 7,000 credit unions hold $1 trillion in assets. These public banks are owned by more than 90 million depositor-members.My own daughter works in the Self Help Credit Union in North Carolina as the sustainability officer. In the State of Maine, population less than 1.4 million, the Maine Credit Union League boasts 175 member banks with 250 ATMs and 680,000 members who do their banking there.
In the 2008-9 financial crash, no Credit Union anywhere needed a bailout, and they had a record of increasing their loans during the time the Big Banks sharply cut back on theirs.
Across the nation, some 2,000 public utilities supply electric power to 46 million consumers. Some large cities are also engaged in capitalist-like enterprises, but they are owned by their citizens. Boston owns Faneuil Hall Marketplace and Hartford owns its Civic Centre – two examples of public ownership of commercial properties. As well – New York City, Los Angeles, Cincinnati, San Antonio, and Louisville all own commercial space in the name of the citizens of those cities.
Many municipalities, states, and the federal government (We the People) own and operate: parks and beaches, public transport, streets and roadways, public schools, public libraries, the Postal Service, the FAA, FDA, EPA, FCC, NSA, correctional institutions (prisons), police, armed forces, and all the agencies that carry out these public functions on behalf of the people. The National Parks are very high profile, but there are many state parks that are noteworthy, and even town parks are much used. Rural township parks such as the 60 acre Damascus Forest, where I live, has well used trails. American society, by its very nature, is cooperative.
If there was any doubt about the nature of the US — cooperative or conflictual — first President George Washington set the question to rest in his Farewell Address. Four key quotes toward the end of the speech summarize the sense of his sentiment:
Observe good faith and justice towards all nations; cultivate peace and harmony with all.
It will be worthy of a free, enlightened, and ... great nation, to give to mankind the magnanimous and too novel example of a people always guided by an exalted justice and benevolence.
Harmony, liberal intercourse with all nations, are recommended by policy, humanity, and interest.
…maintain inviolate the relations of peace and amity towards other nations.
Homo sapiens, even in the nation of rugged individualism called America, is cooperative and often understanding. Most days, random acts of kindness appear among the denizens.
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As humans, not just Americans, we could even take history back to the very origin of our species. Homo sapiens first appeared on Earth in Africa about 200,000 years ago. In the early millennia, we lived in a few small bands of 10 to 30 individuals, and the rate of population increase was agonizingly slow. The geneticists, looking at the current degree of variation in human mDNA, tell us that it took 50,000 years to reach a breeding population of 10,000, barely enough to avoid extinction. Although we had fire and some tool making skills, we were not good at climbing trees to pick fruit and we were not good hunters. Too often we were the hunted. Proper predators had either sharp claws, or long fangs or greater strength than we. Neither were we fleet a-foot. Even today, using the best running shoes and the finest tracks, the fastest humans can’t run more than 25 mph for a short distance. Most animals our size could move faster for hunting or escaping. Sharing shelter with great cave bears, living among lions & leopards, and avoiding cantankerous wooly rhinos that could trample a human into a blood spot, all made life precarious.
Yet, we survived extinction, though sometimes only by the skin of our omnivore teeth. Archeologists and comparative primatologists attribute survival to a greater ability to cooperate with each other than in any of the other great ape species. Human males could hunt in a cooperative fashion, and females would cooperate in looking after the young, freeing new mothers for a little time to gather fruits, vegetables, and roots.
In a hunting group, anger and violence against perceived disrespect of a fellow hunter, for example, would result in a failed hunt. They and their families back at the camp would have to subsist on a diet of edible weeds, roots and berries. Any violent individuals would be ostracized, and such natural selection ensured that their genes would not be passed on. Archeologists have found many sites dated to the Paleolithic period with different kinds of animal bones, proving the success of hunting. Cutting & scraping tools used for the preparation of meals have often been found at the same campsites. Hunters always brought back the prizes of the hunt to the camp, prima facie evidence of cooperation among the members of the band of newest primates.
The females additionally bore responsibility for rearing the young. The survival of the species depended not only on the hunting skills of the men and gathering skills of the women, it was reliant on the nurturing skills of the mothers and their kindness of spirit. The women’s own physiology and biochemistry helped. After pregnancy, the hormones of lactation became elevated and resulted in a peaceful and mellow demeanor. This pleasant nature, over time, would have been instilled socially and, by natural selection, in our genes. To this day, women with a penchant for violence are an exception. Modern research shows that in reaction to danger, men generally react by fight or flight, but women usually gather together to express their fears and work out their best defense. We must remember that 50% of our genome is contributed by women.
A little later in the Paleolithic era, an evolutionary change in brain function took place. About 80 to 60,000 BP (before the present), we started to think more in conceptual terms: cause & effect, the sense of past & future, awareness of the thoughts and subtle emotions of others …. There is plenty of evidence of conceptual thinking in the archeological record. Many cave paintings and a few sculptures have been found over a wide geographic area and long timespan across Europe and Asia — Altimira, Chauvet, Lascaux, Niaux, Peche-Merle, Dolni Vestonice and many other other caves and rock shelters in France, Spain, Italy, Germany, Moravia and Russia. Represented in the art were mostly herbivores — bison, horses, mammoths, antelope, reindeer, ibex, wild cattle (aurochs), wooly rhinos, and musk oxen. At Chauvet, there are a few images of rhinos, one painting showing two angry rhinos charging each other. With rare exceptions, violence is not depicted. Rather, the paintings and sculptures often seem an expression of reverence, often created in sanctuary-like spaces in the inner recesses of the caves. The few lions depicted appeared more like portraits than as hunting carnivores.
Also found widely across Europe and and Asia were between 200 and 300 figurines and amulets representing the human female. These small sculptures in limestone, clay, ivory, and bone have been found at sites separated both temporally and geographically: Willendorf, Galgenberg, Dolni Vestonice, Petrkovice, Kostenki, Lespugue, Balzi Rossi, Brassompouy, and others. Many are works of art in their own right, whatever their original purpose. They are generally described as Venus figures and are often interpreted as fertility carvings, offerings to insure successful pregnancies. In contrast, sculptures of male figures are rare. The Venus figurines may have been meant to glorify women, as icons for goddess worship, pleas for healthy pregnancies, or art for art sake. Whatever the original intent in each, they tell us of Paleolithic cultures in which procreation, nurturing, and art — not violence — were the main concerns.
An early sculpture of a lion-headed man carved out of mammoth ivory, dated to 40,000 BP, was found near Hohlenstein in Germany. It shows the symbolic, representational, and metaphorical thought of the Upper Paleolithic period. The sculpture was estimated to have taken at least a couple of months of full time work during daylight hours to complete. These artists must have been looked after by others of the hunter-gatherer camp for their food and clothing needs. More strong evidence of cooperation!
Later in the same Upper Paleolithic time, we became skilled tool makers using wood, stone, bone, and antler. While there is evidence of wooden spears being used for hunting, the stone tools found in abundance included predominantly blades, scrapers, hand axes, cleavers, and points – tools for cutting meat, breaking into bone marrow cavities, and preparing hides. The points were shaped for use as awls, less as spear points. After 15,000 BP or so, sling thrown stones were used in hunting and atlatls were invented for throwing spears further and faster. Soon after, bows and arrows were figured out. One might conclude that such early technology was bringing hunting and violence into greater alignment. By that time, however, large animals were the preferred game, and it took more than one or two hunters to bring down a giant antelope or a mastodon. Cooperation among the several members of a larger band of hunters was needed, and the large bones of such animals found at human camp sites are proof that the hunts were successful. Ipso facto, cooperation must have been the first rule of hunting. And, back at the campsite, the women gatherers not only brought fruit, vegetables, roots, and berries,they contributed half of the genome of the species. They were peaceful, amiable, and nurturing of the children.
Military historians (anthropologists?) cite a total of 5 or 6 mass graves, widely separated by time and place, in the early Neolithic period (12,000 to 5,000 BP) to show that we were violent by nature, and predisposed to conflict and war. No such mass graves have appeared from the previous Upper Paleolithic era, the time when our genetic heritage was established. They go on into the Bronze age and document the first empire under Sargon the Akkadian, Hammurabi and the Babylonians, the Neo-Assyrians, and 3,000 more years of wars and slavery at various places. It proves that we have a strong cultural heritage of war, but violence and war is not a human genetic imperative. Culture, we know can change in less than a generation. No evidence of a putative violent gene is seen in the archeological record of the previous 190,000 years of the Paleolithic period since Homo sapiens first appeared.
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How, then, do we achieve the transformation to this Next System of a Cooperative Economy? Let’s look at some of the economic movements that have achieved success in their efforts to gain public acceptance. Here are a few: Granges and farmer co-ops, County Fairs, Credit Unions, Buy Local campaigns, family farms, farmers’ markets, community economic initiatives, sustainability anything. All of these are supported by all sides of the political spectrum. Where I live, Wayne County PA, the most conservative (reactionary?) county of the Commonwealth and where Walmart has a superstore, Buy Local is as good as the law of the land.
Buy Local campaigns and multi-national corporations were natural enemies from the start. Buy Local and international trade deals such as Trans Pacific Partnership did not see eye to eye either. A few articles that were uncomplimentary to Buy Local campaigns were published in newspapers and magazines, but they gained no traction.
Worker-owned businesses, if they produce any consumer products, can help promote co-ops by advertising “Worker-Owned” right on the package. Only a few do so now. Consumer co-ops can advertise on the paper bag at the checkout counter. Bumper stickers could shout: “Worker-owned Co-ops never move to China.” or “Worker-owned by people who live here.” The Maine Credit Union League tells its members: “A Maine Credit Union is as close as you are.”
Music at farmers markets always raises the spirits of the customers and browsers. At one of the farmers’ markets — there are six within a short drive of my home— one vendor plays her flute and another his fiddle. At another, a hammer dulcimer is playing to a standing audience. Always pleasant.
A way to turn the economic tables and cause the loss of credibility of Capitalism is to make fun of the present System That can work when a serious critique would cause a retreat to a comfort zone of belief. Remember how the Court Jester could make fun of a bare-bottomed king, yet not lose his head? Parody, satire, humor!
Solidarity can achieve a multiple effect. The effort has already started — Mondragon of Spain has joined forces with the United Steelworkers to bring unionized worker co-ops into being. The first two, Our Harvest and Sustainergy, both in Cincinnati, are in operation. Others in other cities are on the drawing board. Famers, consumers, workers — what a team!
I am a member of the Luddite Poets’ Society and less adept with cyber technology and the social media, but the social networks must be a good way to spread the word that another economic System has come. Someone needs to tell the NY Stock Exchange that Capitalism is as dead as feudalism and should fold its portfolio.
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The last item of business is to select a name for the Next System. Here are a few proposed names.
- The Sharing Economy
- The Cooperative Society
- The We The People Economy or just the We Economy
- The Solidarity Economy
- Community Localism
- The Commons Economy [my own favorite]
Write-in votes are permitted, one person = one vote. No super PACs permitted.
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