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ALTERNATIVE AMERICA
The proliferation of development castaways’ life forces
--The other side of globalization
By Jim Miller
Globalization of has created an “informal” economy among people whose lives have been destroyed or marginalized by global “development”.1 This alternative economy (e.g. “off-books” or “underground” economy) has achieved formal recognition and some acknowledgement as “legitimate”. For instance, Community and Institutional Development, an NGO in Egypt, works in Cairo to support recycling of 3,000 tons of household garbage daily, thus creating 40,000 jobs among the informal sector operators (read, poor). The 1991 Tanzania Declaration led to the acknowledged legitimacy and social necessity of informal activities, outside of official corruption.2
“Development”, stripped of hype, translates into the elites owning or controlling the means of production which depend on the existence of large, desperate labor pools from which to draw workers. The need for a fungible work force is driven by the wide fluctuations of demand versus supply in the global economy and its niche sectors.3
The U. S. Treasury estimates that as much as one-third of the U. S. economy is “underground” and is not taxed. If even half-correct, this part of the U. S. economy represents a significant arsenal in the hands of the poor to correct the imbalance in the distribution of fair compensation between the elites and the working poor and “stand-by” labor pool of the poor and near-poor.4 [Cops, firemen and many government employees are paid “stand-by wages” notwithstanding they are sitting around the police station or fire station house’s TV and munching on pizza - a Car 54- Where are you? redux].
Power companies levy “stand-by charges” in order to “assure” customers of the future availability of power as the demand fluctuates. These charges are built into the rate structure. When you rent a tool from the rental yard, you pay from time out to time in, even if the tool sits unused for half the time. The same is true for most rentals – you pay for both the use and the availability. In contrast, workers are paid only by the time they actually work and are not paid to “be available” should demand surge for the products. The social contract is thus very one-sided as between the formal economy and the pool of workers. Hence, the solution for the workers is to create a “side-economy”, one in which they can be productive, earn income and support themselves during the “stand-by” time.
One solution I happened on during my work at Rohr Industries, can serve as an alternative model for the “stand-by” labor issue. Rohr and the Flexible Bus Company had signed the acquisition agreement where by Rohr was to pay 25 million for Flexible. Teams of engineers, accountants, lawyers, production managers and contract managers had descended on Loudenville, Ohio, the home of Flexible, to complete the pre-close “due diligence” audit of the representations made by Flexible in the acquisition agreement. I was one of the lawyers; my job was to verify the nature and viability of the various legal agreements which Flexible had in process and the effect of existing warranties on downstream liabilities.
During the audit, we stayed in Cincinnati and each day made the round-trip through the beautiful Ohio countryside of green pastures and hardwood forests, to and from Loudenville. I noticed during these trips, the many Amish farms and various enterprises, such as a very large cabinet shop. We also stopped in Millersberg where we visited a cheese factory. I can never forget the pungent smell of the “ripening room” which housed many rounds of cheddar and Swiss cheese. Most of the countryside was filled with small family farms, each with cows, chickens, gardens, orchards and the fruits of agricultural victory over pests.
While delving into the contract files, I asked one of the Flexible managers, how they handled the unemployment between bus orders. Typically, the company would produce, say, 50 buses during a production run, then close shop until the next order came in which could be weeks or a few months away. What did the workers do during the hiatus?
The answer was simply that the workers knew the deal and would work their farms and other enterprises during the intervals. When the new bus order came in, the folks in the neighboring communities would drop their hoes and chisels and head for Flexible. This was a very successful solution to the community’s problem of fluxuating orders and work availability. Essentially, each worker had two or more jobs which would run in tandem. This tandem operation allowed for normal family life and substantial income on a sustained basis.
Many enterprises have developed an “internal economy” which bypasses the “outside economy”. Some operations are in the form of charities and others are based on religious bonds. The Mormon Church has its Covenant Industries and the Hutterites have networked their colonies so as to create barter trade and internal financing. The larger community of which Hutterites are a part, the Anabaptists, have a 400 year history of sustainability. Today Hutterite communities produce over 73% of the fresh eggs sold in Montana. They have fashioned contracts with the IRS whereby they pay no Social Security Taxes in exchange for their agreement not to take Social Security benefits, but to “take care of their own”. Here is an example of the same type of formal recognition of the alternative economy which bypasses much of the “outside” economy. One has to admire the Hutterite communities for their thrift, perseverance, excellent agricultural and business skills, and their rock-hard determination to remain true to their historical roots.
The studies of the degradation of workers pin the blame on the elite who control the resources and both chains – production and distribution. We see many mega-corps which are fully integrated both vertically and horizontally, such as Shell Oil Company. Workers have attempted to integrate both vertically and horizontally, to keep pace with the movements on the corporate side, by creating unions such as the AFL-CIO. Over time, the leaders of the multi-jurisdictional unions are co-opted by the industries they server and cease functioning as the protector of the union’s true beneficiaries – the workers and their families. The union leaders substitute themselves as the primary beneficiaries.5 The sordid history of the Teamster Union bears witness to these truths.
It has been reported that the illicit drug industry is the single largest income producer in the United States. Noriega notwithstanding, many leaders of the countries involved in the production and distribution chain, favor this industry because of the “informal” income it generates. Yet when U. S. citizens attempt to off-set the high cost of U.S. drugs by purchasing Canadian drugs of the same formulary, the United States Government cracks the whip to shut off the Canadian supply because it threatens the obscene profits made by the U. S. drug industry.
Afganistan is the major producer of opium. U. S. military forces could wipe out the annual crop using Agent Orange in one week. Yet the occupation forces are muzzled because the opium trade sustains most of Afghanistan’s informal economy which is seen as a stabilizing influence against the Taliban. In this sense, all of the governments involved in the Afganistan occupation are complicit in this part of the informal economy.
Thus, the explicit policies of governments, some highly contradictive, promote the existence of the informal economy, the existence of which is tolerated because it fills needs which otherwise, would be the burden of the central governments. It is at the point where these informal economies tread on the profit of the elite, that government forces are summoned to curtail the informal economy.
One searches the books and treatises in vain for a “solution” which is legal, vests rights in the workers, is economically viable and sustainable for the vast majority of the marginalized population of both North and South. The major vice, as I see it, is that the elites are elite because they have political, economic and police force control of the resources used in the production and distribution chains. No or little mention is made of a solution which, at its very foundation, creates and sustain workers as owners of the enterprises which sell in the local, regional or global markets. The only profound example I have found of a worker owned global company is that of Mondragon Cooperative Corporation. If you would like to know more about MCC, stay tuned.
Respectfully submitted,
Jim Miller Jimmiller5417@yahoo.com
--The other side of globalization
By Jim Miller
Globalization of has created an “informal” economy among people whose lives have been destroyed or marginalized by global “development”.1 This alternative economy (e.g. “off-books” or “underground” economy) has achieved formal recognition and some acknowledgement as “legitimate”. For instance, Community and Institutional Development, an NGO in Egypt, works in Cairo to support recycling of 3,000 tons of household garbage daily, thus creating 40,000 jobs among the informal sector operators (read, poor). The 1991 Tanzania Declaration led to the acknowledged legitimacy and social necessity of informal activities, outside of official corruption.2
“Development”, stripped of hype, translates into the elites owning or controlling the means of production which depend on the existence of large, desperate labor pools from which to draw workers. The need for a fungible work force is driven by the wide fluctuations of demand versus supply in the global economy and its niche sectors.3
The U. S. Treasury estimates that as much as one-third of the U. S. economy is “underground” and is not taxed. If even half-correct, this part of the U. S. economy represents a significant arsenal in the hands of the poor to correct the imbalance in the distribution of fair compensation between the elites and the working poor and “stand-by” labor pool of the poor and near-poor.4 [Cops, firemen and many government employees are paid “stand-by wages” notwithstanding they are sitting around the police station or fire station house’s TV and munching on pizza - a Car 54- Where are you? redux].
Power companies levy “stand-by charges” in order to “assure” customers of the future availability of power as the demand fluctuates. These charges are built into the rate structure. When you rent a tool from the rental yard, you pay from time out to time in, even if the tool sits unused for half the time. The same is true for most rentals – you pay for both the use and the availability. In contrast, workers are paid only by the time they actually work and are not paid to “be available” should demand surge for the products. The social contract is thus very one-sided as between the formal economy and the pool of workers. Hence, the solution for the workers is to create a “side-economy”, one in which they can be productive, earn income and support themselves during the “stand-by” time.
One solution I happened on during my work at Rohr Industries, can serve as an alternative model for the “stand-by” labor issue. Rohr and the Flexible Bus Company had signed the acquisition agreement where by Rohr was to pay 25 million for Flexible. Teams of engineers, accountants, lawyers, production managers and contract managers had descended on Loudenville, Ohio, the home of Flexible, to complete the pre-close “due diligence” audit of the representations made by Flexible in the acquisition agreement. I was one of the lawyers; my job was to verify the nature and viability of the various legal agreements which Flexible had in process and the effect of existing warranties on downstream liabilities.
During the audit, we stayed in Cincinnati and each day made the round-trip through the beautiful Ohio countryside of green pastures and hardwood forests, to and from Loudenville. I noticed during these trips, the many Amish farms and various enterprises, such as a very large cabinet shop. We also stopped in Millersberg where we visited a cheese factory. I can never forget the pungent smell of the “ripening room” which housed many rounds of cheddar and Swiss cheese. Most of the countryside was filled with small family farms, each with cows, chickens, gardens, orchards and the fruits of agricultural victory over pests.
While delving into the contract files, I asked one of the Flexible managers, how they handled the unemployment between bus orders. Typically, the company would produce, say, 50 buses during a production run, then close shop until the next order came in which could be weeks or a few months away. What did the workers do during the hiatus?
The answer was simply that the workers knew the deal and would work their farms and other enterprises during the intervals. When the new bus order came in, the folks in the neighboring communities would drop their hoes and chisels and head for Flexible. This was a very successful solution to the community’s problem of fluxuating orders and work availability. Essentially, each worker had two or more jobs which would run in tandem. This tandem operation allowed for normal family life and substantial income on a sustained basis.
Many enterprises have developed an “internal economy” which bypasses the “outside economy”. Some operations are in the form of charities and others are based on religious bonds. The Mormon Church has its Covenant Industries and the Hutterites have networked their colonies so as to create barter trade and internal financing. The larger community of which Hutterites are a part, the Anabaptists, have a 400 year history of sustainability. Today Hutterite communities produce over 73% of the fresh eggs sold in Montana. They have fashioned contracts with the IRS whereby they pay no Social Security Taxes in exchange for their agreement not to take Social Security benefits, but to “take care of their own”. Here is an example of the same type of formal recognition of the alternative economy which bypasses much of the “outside” economy. One has to admire the Hutterite communities for their thrift, perseverance, excellent agricultural and business skills, and their rock-hard determination to remain true to their historical roots.
The studies of the degradation of workers pin the blame on the elite who control the resources and both chains – production and distribution. We see many mega-corps which are fully integrated both vertically and horizontally, such as Shell Oil Company. Workers have attempted to integrate both vertically and horizontally, to keep pace with the movements on the corporate side, by creating unions such as the AFL-CIO. Over time, the leaders of the multi-jurisdictional unions are co-opted by the industries they server and cease functioning as the protector of the union’s true beneficiaries – the workers and their families. The union leaders substitute themselves as the primary beneficiaries.5 The sordid history of the Teamster Union bears witness to these truths.
It has been reported that the illicit drug industry is the single largest income producer in the United States. Noriega notwithstanding, many leaders of the countries involved in the production and distribution chain, favor this industry because of the “informal” income it generates. Yet when U. S. citizens attempt to off-set the high cost of U.S. drugs by purchasing Canadian drugs of the same formulary, the United States Government cracks the whip to shut off the Canadian supply because it threatens the obscene profits made by the U. S. drug industry.
Afganistan is the major producer of opium. U. S. military forces could wipe out the annual crop using Agent Orange in one week. Yet the occupation forces are muzzled because the opium trade sustains most of Afghanistan’s informal economy which is seen as a stabilizing influence against the Taliban. In this sense, all of the governments involved in the Afganistan occupation are complicit in this part of the informal economy.
Thus, the explicit policies of governments, some highly contradictive, promote the existence of the informal economy, the existence of which is tolerated because it fills needs which otherwise, would be the burden of the central governments. It is at the point where these informal economies tread on the profit of the elite, that government forces are summoned to curtail the informal economy.
One searches the books and treatises in vain for a “solution” which is legal, vests rights in the workers, is economically viable and sustainable for the vast majority of the marginalized population of both North and South. The major vice, as I see it, is that the elites are elite because they have political, economic and police force control of the resources used in the production and distribution chains. No or little mention is made of a solution which, at its very foundation, creates and sustain workers as owners of the enterprises which sell in the local, regional or global markets. The only profound example I have found of a worker owned global company is that of Mondragon Cooperative Corporation. If you would like to know more about MCC, stay tuned.
Respectfully submitted,
Jim Miller Jimmiller5417@yahoo.com
1
“Activists are finding these communities to be sources of hope rather than despair. Ivan Illich, for example, notes that ‘up to now, economic development has always meant that people, instead of doing something [for themselves], are instead enabled to buy it”.’ [citation omitted]. He finds that ‘development castaways’ constitute a proliferating culture of alternatives.”
McMichael, Philip; Development and Social Change: A Global Perspective, Pine Forge Press (Sage Publications), Thousand Oaks, CA; 3rd ed. 2004; ISBN 0-7619-8810-6; p. 219.
“Activists are finding these communities to be sources of hope rather than despair. Ivan Illich, for example, notes that ‘up to now, economic development has always meant that people, instead of doing something [for themselves], are instead enabled to buy it”.’ [citation omitted]. He finds that ‘development castaways’ constitute a proliferating culture of alternatives.”
McMichael, Philip; Development and Social Change: A Global Perspective, Pine Forge Press (Sage Publications), Thousand Oaks, CA; 3rd ed. 2004; ISBN 0-7619-8810-6; p. 219.
3
“Clothing, women’s in particular, remains a most unpredictable commodity. Weather and seasons and the whims of fashion drive apparel merchants to minimize their risks of getting caught of goods they can’t sell or without items that are flying off the shelves. The industry has historically dealt with this unpredictability by pushing risk down through the production chain: from retailer to manufacturer to contractor and subcontractor and ultimately into the worker’s home. From the retailer’s point of view, this broad base of small, readily available, and easily disposable producers is the ideal solution to the inherent volatility of the market. From the point of view of the workers at the bottom of this industrial pyramid, it is a system that subjects them to relentless pressure, and the worst imaginable form of exploitation and self-exploitation.” Howard, Alan; Labor, History, and Sweatshops in the New Global Economy; No Sweat, (Ross, Andrew, ed. Verso, London, 1997; ISBN 1-85984-172-4), P. 151.
“Clothing, women’s in particular, remains a most unpredictable commodity. Weather and seasons and the whims of fashion drive apparel merchants to minimize their risks of getting caught of goods they can’t sell or without items that are flying off the shelves. The industry has historically dealt with this unpredictability by pushing risk down through the production chain: from retailer to manufacturer to contractor and subcontractor and ultimately into the worker’s home. From the retailer’s point of view, this broad base of small, readily available, and easily disposable producers is the ideal solution to the inherent volatility of the market. From the point of view of the workers at the bottom of this industrial pyramid, it is a system that subjects them to relentless pressure, and the worst imaginable form of exploitation and self-exploitation.” Howard, Alan; Labor, History, and Sweatshops in the New Global Economy; No Sweat, (Ross, Andrew, ed. Verso, London, 1997; ISBN 1-85984-172-4), P. 151.
4
“The sphere of the informal has, incontestably, a major economic significance. It is characterized by a neo-artisanal activity that generates a lot of employment and produces incomes comparable to those of the modern sector… . Resolving practical problems of living spaces and daily life has all sorts of economic ramifications, so much so that the practical importance of the ‘informal economy’ is no longer a matter of debate. Some 50 – 80% of the population in the urban areas of these countries live in and from the informal, one way or another.” Quoted by McMichaels, op. cite, supra, at 220.
“The sphere of the informal has, incontestably, a major economic significance. It is characterized by a neo-artisanal activity that generates a lot of employment and produces incomes comparable to those of the modern sector… . Resolving practical problems of living spaces and daily life has all sorts of economic ramifications, so much so that the practical importance of the ‘informal economy’ is no longer a matter of debate. Some 50 – 80% of the population in the urban areas of these countries live in and from the informal, one way or another.” Quoted by McMichaels, op. cite, supra, at 220.
5
“Meanwhile, leaders of the workingmen’s party in New York City were inducted into Tammany (Pelling, 32-33). These precedents were to be repeated and expanded as the working class enlarged. Big City machines were able to win and hold the allegiances of workers by absorbing their leaders and by conferring favors and symbols that sustained the loyalties of workers on individual, neighborhood and ethnic basis. This not only prevented the emergency of industrial workers as a political force direct to class issues, but it actually freed political leaders on all levels of government to use police, militia and troops against striking workers without jeopardizing the working-class electoral support.”
Piven, Frances Fox, and Cloward, Richard A.; Poor People’s Movements: Why They Succeeded, How They Failed; (Pantheon Books, New York; 1977; ISBN 0-394-48840-7), p. 106. Pelling, Henry. American Labor. Chicago: The University of Chicago Press. 1962.
“Meanwhile, leaders of the workingmen’s party in New York City were inducted into Tammany (Pelling, 32-33). These precedents were to be repeated and expanded as the working class enlarged. Big City machines were able to win and hold the allegiances of workers by absorbing their leaders and by conferring favors and symbols that sustained the loyalties of workers on individual, neighborhood and ethnic basis. This not only prevented the emergency of industrial workers as a political force direct to class issues, but it actually freed political leaders on all levels of government to use police, militia and troops against striking workers without jeopardizing the working-class electoral support.”
Piven, Frances Fox, and Cloward, Richard A.; Poor People’s Movements: Why They Succeeded, How They Failed; (Pantheon Books, New York; 1977; ISBN 0-394-48840-7), p. 106. Pelling, Henry. American Labor. Chicago: The University of Chicago Press. 1962.
Copyrighted 2004, James E. Miller Page 1 All rights reserved.
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