Creating Organic Economies as a Workable Solution for Wealth Inequality
By Daniel Raphael, PhD
Introduction
The motivation for this brief paper comes from the great angst of several billion people in the world who are concerned about the egregious wealth divide. Most well informed individuals are aware that this situation gradually developed over a period of many decades where now the influence of a few thousand people in the world have the capability to create an even greater division of wealth. The traditional economic model that allowed this divide to come into existence is archaic, rigid, and does not satisfy the need for an evolved, organic economic model to keep pace with social change.
The protest against the great wealth divide. In 2007 the richest 1% of the American population owned 35% of the country's total wealth, and the next 19% owned 51%. Thus, the top 20% of Americans owned 86% of the country's wealth and the bottom 80% of the population owned 14%.
“Occupy Wall Street” was a left-wing protest movement that began on September 17, 2011, in Zuccotti Park, located in New York City's Wall Street financial district, against economic inequality. The Occupy Wall Street protests continue internationally as “The Occupy Movement.”
[November 14, 2017] The wealthiest 1 percent of the world's population now owns more than half of the world's wealth, according a Credit Suisse report. The total wealth in the world grew by 6 percent over the past 12 months to $280 trillion.
America’s total wealth in 2017 was about $95 trillion.
Wikipedia
As a Social Evolutionist Would See It
If we look at the 1%-99% wealth divide as a social evolutionist would, then what we are seeing is a backwards or devolutionary movement of ownership to the pre-Great Depression era where ownership of companies and corporations had come into existence as a stark division between owners/stockholders and workers. Unfortunately, that separation became an embedded organizational mindset between employers and workers; and then embedded in corporate policies and economic theories. In other words, the separation of workers from ownership was a manmade concept, and not organic to economies for producing profits.
Creatively, when we reframe this situation in terms of an organic economic system rather than the existing arbitrary, or manmade, linear economic system, then several insights become available.
● If we look at the devolutionary trend from its beginning, and then apply a positive and constructive modification to the lopsided growth of ownership, a humanitarian approach would include employees in the ownership of the company to create an organic economic system within that respective business; and eventually within national economies.
● An organic economic model would inherently become adaptable to the vicissitudes of changing social and economic conditions. Being adaptable, it would provide progressively evolutionary economic models for an integrated, organic system (holism) of ownership, management, investor shareholders, and employee shareholders, all consciously working together in the business of making profits, with an invested interest for keeping the business in business.
Then everyone involved would become an entrepreneur of those businesses, with the same concerns for ingenuity, productivity, market share, and efficiencies, for example. The business of making profits to stay in business requires a holism of attention and concern by everyone involved in that business.
● This would not be a “cooperative” or “partnership” between employees and ownership/management, but rather owners and employee shareholders working for the same ends.
Well Educated Employees
In comparison to workers during the Industrial Revolution, today’s employees are in the main well educated with some being very well educated, highly literate, and exceptionally well informed. Work has moved from earning wages to sustain one’s physical survival to employment as an extension of one’s purpose for finding meaning in our life. Education has given hundreds of millions of employees the expectation that their life has meaning, where their employment has become an expected means for actualizing their innate potential.
What is missing from this educational influence is the means to create a bonded, personal identification between their employment and the expression of their purpose and meaning for life and living. In other words, employees today revile against the thought that they are just another tool of production and profitmaking to be used and discarded to keep the bottom line black with excellent dividends to shareholders and the owners.
Whether the U.S. Army’s motto “Become all that you can become” is embedded in the market audience of potential recruits or the many millions of the larger audience, it has prepared employees of democratic societies for a higher dimension of life and existence. Hundreds of millions, billions, of employees have been prepared by their education to actively and intelligently engage their employment as owners would. The sense of entitlement of newer generations (Generation X= born ’66—76; Y=’77—94 Millennials; and Z=1995—2002 Next Generation) is deeply embedded in their cultures and has created a forcefield for change in all venues of their lives. There is no going back, neither would they want to. What is suggested here is the means to incorporate an economic culture change for all new and older generations, peacefully and beneficially.
The Complemental Relationship of Education and the Seven Innate Values of Humans
The tremendous influence of education upon the thinking of billions of employees has broadened the meaning of human existence that is fully supported by the seven values that are innate to humans. These are illustrated below.
Values. Clinical psychologists and business consultants all agree that values underlie all decision-making, whether that decision is made in a micro-second or takes years to formulate. The decision to seek higher education is a very natural decision simply because of our personal response to the innate value “growth” that exists in everyone.1 The four primary values (life, equality, growth, and quality of life) are the original cause of human motivation and seem to be embedded in our DNA. They have incessantly urged our species to make decisions that have sustained our species for over 200,000 years. They are as active today as they were then.
The original cause of the moral indignation for the 1%-99% wealth divide is from the primary value equality. Equality is as powerful a motivator for human action as LIFE, the ultimate primary value. Because of that value, we have an innate sense of what is fair, and what is not. The innate sense of almost all people, including those of the 1%, is that the wealth divide is unfair.
Further, it is immoral because it threatens the capability of individuals to grow into their innate potential with an equal capability as members of the 1%.2 People, whether they are employed or not, see the wealth divide as a powerful threat that would cause life-altering consequences to their lives, simply by the decision of members of the 1% to increase their wealth. Based on the innate values of all people, the 1%-99% wealth divide is inhumane because it is a clear evidence of the lack of empathy on the part of the 1% for those of the 99%. The proof lies in the 1% failure to voluntarily offer compassion to rectify that imbalance.
The Odd Things about this Situation
First, there is no one, really, to blame for the 1%-99% wealth divide. It is a development that is not fair, but it is also not illegal. It is simply a natural development of the financial-economic environment that came into being over the last 175 years when Cornelius Vanderbilt, John D.
Rockefeller, Andrew Carnegie, and J. P. Morgan 3 forever changed the course of the economies of most developing democracies. This development is “natural” simply because of the motivating energies of the innate four primary values working in the lives of these men who became so wealthy that they could eventually adapt regional and national economies to suit their own visions and goals.
At the time, national economies actually needed the artificial economic designs of these men that allowed other powerful men later to grow those economies to where they are now. The epitome of the traditional artificial economic model is now exemplified in the astronomical accumulation of wealth in the control of the 1%.
Second, very, very few people who are of average income have ever really given much thought about what it would be like to manage $50-250 billion in wealth. Those who are in the 1% of the wealth division know intimately what that is like. Thinking imaginatively, what if you were the owner/manager of such a vast amount of money AND you wanted to help humankind by using some of it without concern for a return from your gift? Knowing how that amount of money can change a person’s life, both constructively and detrimentally, how would you go about gifting some of that money to humanity?
To make this imaginative scenario shorter than discussing all of the options available, a person of this caliber of wealth already knows that money is best appreciated when is earned. Logically, a best way to attach appreciation to larger amounts of money is to attach it to the money that people already earn. Intuitively, that would mean that this increase of money that is attached to existing earning ability is NOT provided in the form of an increase of hourly wages or salary; but, rationally attached to the investment of their life in their employment as an employee-investor. In other words, employees would, by the altruistic, empathic, and compassionate generosity of multi-billionaires who provide shares to employees, become co-owners of the company they work for.
The benefits for forward thinking billionaires are several.
* First and foremost, proactively implementing this program would leave the 1% to decide which corporations to redefine employees as employee investors, as opposed to Congress bungling the process without generating any effective results.
* It would not be a governmental program supported by a significant increase in taxes on the 1%;
* It would set an unprecedented example for other billionaires who are of like mindedness;
* It would not be limited by the constraints or qualifying limitations for grants in aid from a foundation or other philanthropic organization;
* It would go to those who already appreciate being employed, and become an inducement to remain employed;
* It would be of great benefit to local and national economies by putting this money into circulation where it would be multiplied in effectiveness;
* Not last or least, such a program would provide a legitimate and highly useful means for assuaging “wealth-guilt” by those of the 1% while at the same time providing a real-time experience of empathy coupled with compassion, which are some of the highest forms of being fully human and humane.
These suggested benefits are only just a few examples of many that can and will be attributed to such a generous program.
Redefining the Word “Employees” and Inventing Organic Economies
Four major factors are now intersecting that offer corporations and national economies the opportunity to invent a self-sustaining organic economic model:
1) Widespread education;
2) the anachronism of the traditional economic model;
3) the egregious appearance of the 1%-99% wealth divide; and,
4) our full awareness of the seven innate values of our species. These offer us a very plausible possibility to develop a workable solution to the wealth divide while also empowering corporate and national economies to sustain their growth; and, initiating the process of redefining employees as shareholder employees by voluntarily making them shareholders of the companies they work for.
Risk. The risk of being in business has always been an accepted assumption in the traditional economic model, and accepted by owners and shareholders. Newer generations of employees, many of whom have received higher education beyond a high school diploma, have questioned and even challenged this assumption.
For them, their financial risk is far greater than that of the 1% because they do not have the financial reserves to support their lives, families, and children when they are laid off due to a downturn in the economy, or for other reasons. The personal life and circumstances of the 1% is virtually unaffected by that situation. These generations see employment as a high risk venture because their lives and that of their families could be turned upside down by a decision of owners and shareholders to shutter the doors of their businesses and call it a loss. For knowledgeable and thinking employees, such a situation and relationship to their employment is an ever present risk.
Looking at this proposal from the current owner’s and investor’s standpoint, we are urged to ask a very fair question, “What would propel me/us to adopt such a proposal? It would obviously decrease my dividend earnings and the dividend earnings of all existing shareholders.” The answer to that question will probably not be answered until the economic situation where national and transnational corporations are forced to engage an involuntary “push-pull” situation to prevent the demise of the corporation as a mechanism for earnings generation.
The “push” will come into being when national and global economies begin the long term downward descent into recession and depression. Recent evidence and opinions of economists and financial advisors indicate the descent into recession/depression has already begun. The obvious and historically recurring question, “What can we do to turn our economies around and become profitable again?” will be asked again by not just economists but also by many thousands of investors, shareholders, owners, and employees.
The suggestion of redefining employees as employee shareholders does have a cost for someone. The cost comes in the form of “debit spending” by using the trillions of dollars in financial instruments held by the 1%. Doing so would have several beneficial outcomes. It would be a positive development compared to “deficit spending” by the government that creates more debt. It would provide an opportunity to demonstrate the humanity of the 1% to the world by redefining employees as employee shareholders. Employee shareholders would be seen as an asset rather than expense to be eliminated. The money would be retained in the corporation, rather than the 1% being divested of their amassed wealth by an increase in taxation or some populist movement. It would support the nation’s economy in a time of extreme economic downturn and enable it to sustain its growth curve.
The “pull” comes from the understanding that by redefining workers as employee shareholders, they will then become active and invested generators of creative solutions and also share the economic problems they will have in common with owners. The “pull” offers the 99% a logical, moral, and ethically legitimate opportunity to share the fruits of the investment of their lives in their employment, while also sharing the risk inherent in business with owners and investor shareholders. This will create an organic economy within those companies, and eventually within national economies, and later the global economy.
What is essential to make this a workable solution for the long term is having a working knowledge of the seven values that provide the dynamic of human motivation.4 Of logical necessity, incorporating the seven values into the founding documents, organizational decision-making processes, and operating policies, the corporation will be adopting the self-sustaining capability that has proven to sustain the survival of our species. These values offer timeless and universal criteria for decision-making that is humane and support the ongoing sustainability of profit-making, non-profit, and not-for-profit organizations.
Philosophically
Philosophically, the moral justifications for this evolutionary economic development are several, based on the morality and ethics described in Making Sense of Ethics — A Unique, Unified Normative Theory of Ethics, Values, and Morality.
● An evolving society that is becoming more and more mature begins to value all individuals equally, that each individual has a value for existence and meaning equal to anyone else in any and all circumstances, including members of the 1%.
● The standard of this moral imperative logically points to the equal necessity of compassion for employees by giving them the opportunity to grow into the innate potential they brought into life to assure that they have an equal quality of life as others.
● The remarkable aspect of these seven values is that the four primary values, (life, equality, growth, and quality of life), are the values that have generated the material and technological advancement of nations; and these are the values that will underwrite the decision-making of employee shareholders to ensure their employer corporation remains in business.
To paraphrase Dr. Abraham Maslow, work has become a process for actualizing the innate potential of the individual; and educated and informed employees know this.
Morally, as the citizens of democratic nations have become more educated and informed, the motivation for employment to make a living to survive has been transformed into a means for individuals to find purpose and meaning in their lives, and to become the full dimension of their potential.
Conclusions
What is proposed here will take immense foresight and courage to initiate the economic evolutionary step that will lead to greater ownership by employees in order to prevent a disastrous collapse of production across all industries and commerce. Voluntarily sharing 5% of ownership per year for 8 years, resulting in a 60-40 split between invested owner/stockholders and employee shareholders would provide several very highly positive outcomes.
● Workers, as consumers, would begin receiving dividend checks that they would use to increase their buying power and increase the demand for goods and services, boosting the economy;
● The division between management and labor would soon become less and less adversarial;
● We could expect that absenteeism, sick-outs, and malingering would decrease;
● Likewise, we could expect that productivity would increase as workers would want to make their time and effort more effective to improve their dividend checks;
● The benefits of being an employed worker in a company that has an ownership sharing model in place would be highly attractive to those who are unemployed;
● The relationship between hourly wages and dividends would become a point of necessary discussion;
● It answers the question that is always asked when a recession or depression occurs, “How do we move out of this economic depression without the public revolting against our wealth?”
● This process will initiate an economic evolutionary step, call it Employee Capitalism, that is organic to ownership and production, i.e., it embraces the common field of profit-making for anyone who is involved in the productivity of the company.
● Adopting this evolutionary economic process would necessarily be accompanied with the training and education of employees to empower them to think as owners and entrepreneurs.
● A sharing of ownership would strengthen and empower democratic economic cultures as compared to non-democratic economies.
2nd Conclusions
● The return to the “good old days” of the conflicted division between owners and employees is gone;
● There is no going back;
● Doubling down, ratcheting down, holding the line, staying the traditional course, and such will never resolve the wealth divide;
● The rationale for “staying the course” of the traditional division between ownership and employees, as it exists now, is unintelligent, un-empathic, and lacking in compassion and humanitarian understanding of what will eventually and inevitably will come about;
● Employees in developed democratic nations have become too well educated, knowledgeable, and informed to accept the 1%-99% wealth divide as morally and ethically justified;
● Everyone enjoys the financial benefits of income, whether they are owners and shareholders or employees, but now employment has become a matter of existentially finding meaning in the purpose of employment. Employees today are in the main very well educated, have been taught how to think in several dimensions to create solutions to previously unfathomable social and economic problems, yet are held at arms length in being accepted and embraced as co-owners of the companies they work for, the very companies where they have already invested their lives. In the minds of such employees, they are already deeply invested in the present and future of their employment.
Courage and Bravery. It takes courage to reflect upon a difficult situation and make a decision. But to enact that decision of courage requires immense bravery, the kind of bravery that propels you to leap from the brink fully knowing that you may survive or you may die. What makes the act of bravery conscionable is the awareness of the raging fires behind you. Then the logic and reasoning for making the jump is seen as the most capable of overcoming the challenges behind, and offering the possibility to confront the challenges after making the leap. (Papillon, 2018).
Afterword
For those who appreciate history, yet cringe at applying its wisdom to similar situations of today, the insights gained from observing the long arc of history that continues to unfold today are available to all of us, if we would just look. For those who see the events of today as a segment of that long arc, then you know as I do what the inevitable outcomes of the 1%-99% wealth divide will look like if we do not proactively initiate creative solutions. Change is always inevitable. Only conscious and intentional decisions are capable of modifying that inevitable change to benefit all of us. Failing to make a decision is immoral concerning this divide. The outcome will be determined by the courage and bravery of everyone to embrace the decisions that will reveal whether we are truly human and humane, or not.
NOTE: This is my second article to use the concepts of the seven innate values of Homo sapiens and their subsequent morality and ethics to suggest a strategic resolution for major social and technical problems. The first was Artificial Intelligence, A Protocol for Setting Moral and Ethical Operational Standards that can be found at my site.
1 - Raphael, Daniel 2014-2018 Understanding Social Sustainability. Available as a downloadable PDF from the author’s Google website. See BIO at end of this paper.
2 - Raphael, Daniel 2019 Making Sense of Ethics — A Unique, Unified Normative Theory of Ethics, Morality, and Values. See p 22: “Moral definitions provide us with a set of rules to guide human decisions and actions to prevent destructive life-altering behavior of human interaction.”
3 - The Men Who Built America. A television series that focuses on the lives of these men that tells how their industrial innovations and business empires revolutionized modern society. [Wikipedia]
4 - Raphael, Daniel 2019 Understanding Social Sustainability. p 19.
BIO: Daniel Raphael, PhD
Daniel Raphael is an independent original thinker who does not work for, associated, or affiliated with any organization. He is a Viet Nam veteran; with 18 years experience working in adult felony criminal corrections; father of three and grandfather of four children; former volunteer fireman, small business owner, inventor, and manufacturer of a household sewing machine product; self-taught theologian, ethicist, and holistic life coach; principal of Daniel Raphael Consulting since 2003; and author and publisher of numerous books, papers, and articles. Daniel enjoys public speaking and has taught social sustainability and spirituality classes and workshops nationally and internationally and is well prepared to enlighten and entertain you.
Education
Bachelor of Science, With Distinction, (Sociology).
Arizona State University, Tempe, Arizona.
Master of Science in Education
(Educationally and Culturally Disadvantaged),
Western Oregon University, Monmouth, Oregon.
Doctor of Philosophy (Spiritual Metaphysics),
University of Metaphysics, Sedona, Arizona.
Masters Dissertation: A Loving-God Theology
Doctoral Dissertation: A Pre-Creation Theology
Writer, Author, Publisher
(1992) The Development of Public Policy and the Next Step of Democracy for the 21st Century, NBHCo.
(1992) Developing A Personal, Loving-God Theology, NBHCo
(1999) Sacred Relationships, A Guide to Authentic Loving, Origin Press [OOP] Available from the author.
(2002) What Was God Thinking?!, Infinity Press ISBN 0-9712663-0-1 or from the author.
(2007) Global Sustainability and Planetary Management
(2014) Healing a Broken World, Origin Press [OOP]
● (2014) Social Sustainability Design Team Process
(2015) Social Sustainability HANDBOOK for Community-Builders, Infinity Press
● (2016) The Progressive’s Handbook for Reframing Democratic Values
● (2016) Organic Morality: Answering the Critically Important Moral Questions of the 3rd Millennium
● (2017) Designing Socially Sustainable Democratic Societies
● (2017) A Theology for New Thought Spirituality
● (2017) God For All Religions — Re-Inventing Christianity and the Christian Church —
● (2017) God For All Children, and Grandchildren
● (2017) Centers for Sustainable Families and the Millennium Families Program
● (2018) The Values God Gave Us
● (2018) UNDERSTANDING Social Sustainability
● (2017) Pour Comprendre la Viabilité Sociale
● (2017) Entendiendo La Sostenibilidad Social
● (2018) Making Sense of Ethics — A Unique, Unified Normative Theory of Ethics, Values, and Morality
● (2018) Answering the Moral and Ethical Confusion of Uninvited Immigrants
● (2018) Restoring the Greatness of Democratic Nations — A Radically Conservative and Liberal Approach
● (2018) Artificial Intelligence, A Protocol for Setting Moral and Ethical Operational Standards
● (2019) Sustainable Civilizations, A General Critical Theory Based on the Innate Values of Homo Sapiens — An Introduction to Planetary Management
(2019) The IS of IT All (Under construction.)
● = Available as a PDF document at the link
Contact Information:
Daniel Raphael, PhD
Daniel Raphael Consulting ● Social Sustainability Leadership Training and Consulting daniel.raphaelphd@gmail.com ● Cell: + 1 303 641 1115 ● PO Box 2408, Evergreen, CO 80437 USA