In my June 2012 column I asked “Does Capitalism Have a Nature?” because, if it did, perhaps it might be mutable just as are other forms of life. In keeping with this thought the authors of two recent books argue strongly for significant changes in the way we conduct our capitalist economy: “The Financial Crises and the Free Market Cure” by John A. Allison (2013) and “Democracy at Work: A Cure for Capitalism” by Richard Wolff (2012). The first book calls for the removal of government regulations from the banking industry and most other industries as well. Additionally, the author, the retired Chairman and CEO of a large bank and wealth management corporation, while denigrating those he terms the “elites” of the academic world, nevertheless proclaims that “thinking labor” is a much more valuable effort than physical labor, thereby deserving of much higher salaries. He concludes that we should either eliminate the minimum wage or reduce it substantially. In contrast, the second book, whose author is Professor of Economics Emeritus at the University of Massachusetts, calls for converting industries to workers’ self-directed enterprises or WSDEs and bringing democracy into the workplace.
As you might expect, I am skeptical of anything promoted as a “cure.” However, given our current low standing among developed countries on most measures of health, I would welcome any improvement in the efficiency and quality of our industries if, and only if, it also helped to manage our Nation’s resources, including our human resources, more equitably, healthily, and sustainably.
King Arthur Flour (KAF), a business I had the good fortune to explore first hand this past October, is a business which has, indeed, shown itself capable of altering the manner in which it treats its employees and conducts its business. Founded in 1790 as the Henry Wood Flour Company for the express purpose of providing this newly formed country with high-quality flour, it became King Arthur Flour in 1896 by which time it provided flour milled solely from U. S.-grown grains. It moved from the Boston area to Norwich, VT in 1984 and in 1992 began teaching bread making in local schools. In 1996 its then owners, Frank and Brinna Sands, began the process of selling the business to their employees, creating an Employee Stock Ownership Plan or ESOP. This process was completed in 2004 and in 2007 it became a founding Certified Beneficial Corporation making it a business not unlike Wolff’s proposed WSDEs. The base pay for KAF employees is at least 14% greater than the livable wage, which is $9.04 an hour in Vermont, and every employee has only one vote regardless of the number of shares he or she owns. Note that in such industries labor unions are a non-issue.