Neighborhood Economics: Crafting an Economy of Care Beyond Corporate Greed

Discover a future where wealth doesn't rule, but serves all of society. That's the world Marjorie Kelly, the insightful author of "Wealth Supremacy," envisions as she joins us to dissect the roots of economic inequality and the extractive economy. Through her transformation from a proponent of socially responsible business to a critic of wealth-centric systems, Kelly sheds light on how private equity and corporate greed fuel a destructive cycle of profit maximization, neglecting the welfare of our planet and its inhabitants.

Embark on an intellectual odyssey as we navigate the perilous waters of wealth's impact on our natural resources, with a focus on the commodification of water rights by hedge funds. Kelly's compelling narrative, reinforced by mindfulness principles, challenges our acceptance of a 'hungrier-is-better' economy, drawing parallels to the Buddhist 'hungry ghost' as a metaphor for our endless craving for more. The discussion broadens to question the cultural and ideological underpinnings that sustain greed as an economic necessity, urging a critical reassessment of the myth that maximizing profit is the paramount goal of business.

Uplifting in tone, the episode culminates with a foray into the realm of democratic and worker-owned business models that hold promise for a more equitable distribution of wealth. We celebrate entities like the Democracy Collaborative and Cooperative Home Care Associates, who are pioneering the charge toward an economy where democracy, equity, and sustainability are not just buzzwords, but the bedrock of business success. Listen in to grasp how these transformative models not only challenge the status quo but pave the path to a future where thriving economically is a reality for everyone.

https://marjoriekelly.org/
https://democracycollaborative.org/marjorie-kelly

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Transcript

Joel: 0:33

What if investing in each other could change the world? I'm Joel Skeen with bizradious, and this is the Mindful Marketplace. All right, welcome. I'm so glad to have you, marjorie Kelly, on the show here today. I just finished your book Wealth Supremacy and I've got to say I read a lot and this year I've read some books that have really expanded my knowledge and challenged me and challenged the way that I think, and yours is probably right at the top of the list of where I would tell people to start with what I've read this year. So I am very honored, very humbled, to get to have you on the Mindful Marketplace here as part of this series that we're doing with Neighborhood Economics. And yeah, I almost don't know where to start because there's so much to cover, but I think maybe giving a little background on where you come from and how you got to the perspective where you wanted to write this book would be a really good place to start.

Marjorie : 1:38

Sure Well, joel, thanks for having me. It's fun to talk with you. I wrote this book because I got discouraged.

Marjorie : 1:48

I've been doing this work, working for a democratic economy, for more than 30 years. I started out as the founder and publisher of Business Ethics Magazine, which is all about socially responsible business and investing, and I thought that individual business people good people, good investors could change the world. And I came to see that the problem is systemic and I moved on to other institutions. I'm at Democracy Collaborative now and we do a lot of work in local economic development. I've met so many visionaries, joel, over the years and written about them. Hundreds I think thousands who have worked out how do we really do a democratic economy.

Marjorie : 2:35

And yet I've been discouraged to see that things are getting worse and not better. And so I got mad and I said you know, we can't just talk about the positive, we cannot just build the positive. We need to turn and look at this beast, this extractive system, and delegitimize it. That's the ultimate power that we have. We need to recognize that it's a form of illegitimate bias and that's how I came to this term, a wealth supremacy, because that's really what it's all about.

Joel: 3:10

Yeah, and I think a bias is a good way to kind of talk about it. I think that a lot of us, you know, growing up we don't recognize the own biases that we have. That's why their biases right Is that we're up, we're taught a certain thing and unless we question those underlying assumptions and we question, you know, on this show we like to say we highlight the people that are questioning the assumption that there's just one bottom line and we do put a big focus on those solutions, on that solidarity economy that you spoke about near the end of your book. But you said something at the beginning where you said let the seeing guide us. And I think that that's a really beautiful principle for any endeavor is to actually kind of be willing to let go of the biases, let go of the conditioning and just let what you actually see guide you. So you were in, you did both work in finance and in nonprofit work. What was the seeing that you had there that guided you in this direction?

Marjorie : 4:08

Yeah, I'll start by saying, Joel, I had the good fortune to study with a Buddhist teacher for many years and I have a regular meditation practice, and so just learning to sit down and see your life is a discipline that I welcome and I value. And so what I have seen over the years and it took me years to see it was, first of all, that capital is in control of corporations. We tend to blame CEOs. We think it's about bad guys or bad corporations, and when you see it over time, as I did at Business Ethics, you recognize no, capital is in control and CEOs get paid to make shareholders rich and if they don't, they get fired. So I saw that. And then I also saw it's not just publicly traded companies.

Marjorie : 5:03

A lot of the action has moved into private equity, public companies or it's public equity. You and I could go buy shares tomorrow if we had any money. Private equity is only the big guys can play there, but they're out there buying up more than 100,000 companies right now and turning them into profit maximizers and ruining newspapers and bankrupting retail. And you start to see that when capital is extracting a maximum amount, that is driving so much dysfunction in our system and it's easy to be overwhelmed by this. People go oh, what can I do about it? And I just I start the book by saying just relax, just see what's going on, see the simplicity of it, see the enormity of it. Let's just start there.

Joel: 5:55

Yeah, absolutely, and I think that that's you know, when we talk about starting there and we talk about kind of this move towards where everything is kind of privatized. You mentioned private equity. One of the things we talked about on the show is how private equity over the last 10 years. Is that a strategy to actually buy up single family homes? So when you're and rent them out or flip them or whatever? So when you go to buy?

Marjorie : 6:17

a house.

Joel: 6:17

Now you're not just competing with your neighbors, you're competing with the biggest financial institutions in the world trillion dollar companies and that property ownership dynamic seems to be at the heart of this in a lot of ways. I'm wondering if you could speak to that.

Marjorie : 6:35

Yeah, thomas Piketty, who's the famous French economist, said every society has a political regime and a property regime. He didn't say economic regime, he said property regime, because it's in property that the power and control of an economy is rests, and property has today been financialized.

Marjorie : 7:03

You know companies are viewed as pieces of stock. You know property is viewed as everyone knows what the value of their house is, so you view it as this investment asset, and so our property regime is financialized. You're right, and that is where the power lies. And so the 2008 meltdown. That was because big capital had financialized mortgages and it did its shenanigans and virtually blew up the global economy. Well, since then, as you said, it's now financializing houses and it's driving houses out of reach of ordinary people can't can't buy a house anymore, and what they're also doing is, their course, they're driving up rents, so it's become a massive form of extraction.

Joel: 7:54

Yeah, and you, you start the book actually talking about how the new developments that it's you know it's it's reaching in, not just into it, not just from businesses or from things that we normally think of as being a part of financialization or part of the economy or part of business, but into the very just basic elements that we have on the planet that we need in order to survive, and you start by talking about these, these stories about water, and I was very interested in that.

Joel: 8:22

My dad grew up in Flint, michigan, where there's been a water crisis now for years now. Where, though, there's been? Lead in the water and it's still not fixed.

Marjorie : 8:32

Why did, why did you pick water as kind of a central issue to to demonstrate that and to start the book with it's a very scary story, and and and that is that right now, hedge funds are out there buying water rights in Colorado and the West. Big, big financial firms are out there buying water rights. Fortune magazine said water is, in the 21st century, going to be what oil was in the 20th century it's the precious resource that determines the wealth of nations. And so I posed the question at the beginning of the book. I mean, who is going to own water, who is going to own the earth? Essentially, because capital is not only seeking to privatize water, they're seeking to privatize and own ecosystem services, which includes, you know, swamps and forests and, and you know, grasses along the the waterfront. So capital will wants to own and extract everything, and it's already overblown, and so it's.

Marjorie : 9:49

You know, financial assets are right now five times GDP, but they were equal to GDP in the 1950s when I was a kid. So they, it's this massive extraction machine sitting over there over the real economy and extracting the resilience of our planet and our society. We don't see it, we don't have the metrics to talk about it, but because you know, and the larger it gets, it has to get larger still, because the basic principle of investing is you have to have more next year than you had you had this year, and so it has to find new ways to extract. Water is one of them. This hedge fund manager said water is a trillion dollar market opportunity, and I quote some water activists saying water is a human right. Water is needed by every living creature every single day, and so that that that's a dramatic choice that we face. Do we have a democratic economy where we own and control assets and and and and the economy is is for life, or just this big capital, which means a very wealthy few own and control everything and charges exorbitant rates?

Joel: 11:06

that that's the, that's the fork in the road yeah, what you just said about the need to always grow and the need to always maximize. Remember when I was coming up in business and I work in the financial services industry and I would remember being taught very clearly like look, your business is either growing or it's dying and.

Joel: 11:25

I think the more I reflected on that, the more I realized that, yeah, there really is not a homeostasis, there isn't really a spot in the way that things currently operate where we can actually just kind of let things thrive in an ecosystem that sort of feeds itself.

Joel: 11:39

It always has to grow, it always has to get bigger and it always needs to consume more in order to do that it's. We were talking about elements and water and it and it reminds me a little bit, honestly, a fire like I think you know, if we think about, I think, capital, capital in a lot of ways and the, the ability to inject capital and to create a return on investment is this really incredible and kind of system and society and life changing a thing, the way, in a way, that fire was where we now all of a sudden can do all of these things that we never could do before, but at the same time, if fire, like if we let everything be run by fire, we wouldn't still be here, we would have gone extinct. You know, thousands, hundreds of thousands of years, tens of thousands of years ago, and so it's it. It does.

Marjorie : 12:26

I'm wondering if you can kind of speak a little bit to that you call it the myth of, of maximizing the myth of of maximization mm-hmm, yeah, so let me just riff a little bit on what you said about fire, and then I'll come back to the myth of maximizing. And so I think that financialization, which is the state in which there's just too much financial wealth out there, particularly in too few hands, is very much like excess carbon emissions. Right, you know, heating our homes, driving our cars, that's normal stuff. That feels like great stuff. Right, internal combustion engine was it, was, you know, great advance for civilization. But if, if we have too much of it, we alter the living planet. And that kind of blows your mind when, when you realize that. Well, it's the same thing with finance. You know, if any of us who are lucky enough to have a few assets, you want to see them go up every year, you want to have more matter than that. That seems normal. But then, when you have too much of that, it alters the living function of the entire economy and, in fact, the planet too. So so, how, how, how do we get there?

Marjorie : 13:37

Well, the system is designed around what I call a core myth, the myth of of maximization, the myth of maximizing. Business schools teach that you know, you're supposed to maximize returns to shareholders. That's what management is about investing the premises. You're supposed to maximize risk adjusted returns for your clients, so it's based on this myth that no amount of wealth is ever enough. You can have tens of billions of dollars and still it's not enough. You're going to invest it and it's supposed to be more the next year, and, and this in return on investment is supposed to be a maximum limitless and eternal. It goes on even after death, and this is the core principle, and this leads inevitably to a system where you have way too much financial capital, which grows by extracting from the rest of us, and it's it's a perilous situation yeah, you refer to it.

Joel: 14:42

Uh, I loved this turn of phrase. You see, you refer to it as the the spirit of a hungry ghost uh, huh, yeah, that that's a buddhist term, you know.

Marjorie : 14:52

It's about people who um, can, can never, can never get enough, can never be fully fed. They're just always hungry and our, our, our economy is built on that. On that premise, you can never have enough wealth.

Joel: 15:07

I mean, if you think about that, that's, that's uh neurosis, uh, or worse yeah, yeah, I mean, I definitely have that thought sometimes when I think, because I, you know, the becoming a billionaire is like a, is this new goal that you know, you see, a? Lot in in the world of people you know in live like I want to become a billionaire. But if you think about it like if you went to someone's house and they had a billion of something like, what would we call that person right?

Marjorie : 15:32

but at the same time, yeah, right, yeah.

Joel: 15:36

But, at the same time it's not what I get from your book is that there really is an empathy, I think, for the people that are in that system and that are attempting to maximize their own profits. Because, you know, it seems like it's what you're saying. Is it's not about? You know? Sometimes we have this, I think, this myth that well, if we just had better people in charge of the system, that everything would work out. But you said that it's not about changing the people at the top, because when capital and I think I'm quoting you directly here, I hope I am when capital takes control, greed becomes non-optional.

Marjorie : 16:17

Yeah, this is hard for us to get because you know we're primed to look for bad guys. Honestly, if we could just round up the bad guys and get rid of them, then things are going to be better. But bias is largely unconscious and bias is, you know, toward capital, toward wealth, is embedded in the institutions and practices, so it's on autopilot in a lot of ways, and so it's not as though I mean institutional investors are where the real power is and also I mean they're managing assets on behalf of the wealthy. But you know, when they're sitting there going well, how can I move these assets up the risk return spectrum and try to increase my returns for my clients? They're not like grabbing their hands going, I'm going to destroy the planet, that's not what's happening.

Marjorie : 17:13

You know the thing is they're doing technical, technical work, they're looking for higher returns and capital has wealth, has this underside that we tend not to look at. You don't see it. When you look at your investment return, any of us who are lucky enough to have an investment statement, you know it just shows you numbers. Well, I got, I made 5% last year, gosh. You know I wish I made 7%. You know I've got $100,000. I wish I had 110. You know? So that's all you see, right? You don't see who is laid off in order to boost these profits at a company.

Marjorie : 17:50

What companies were driven into bankruptcy so as to drive up the wealth of the institutional investors in private equity. Or you know, exxonmobil in 2022, share price went up 80%, and that was that's a year when, you know, the skyline over San Francisco was orange, with fires and flooding in New York City and Vermont. But you know we don't put those together. You just go oh, look, you know, up 80%. Isn't that a good thing? So there's this huge disconnect. And so, yes, it's easy to think about individuals who are greedy, and that certainly exists, and there are people who are very, very greedy, but the system itself mandates and rewards and it kind of neutralizes greed. It just seems like it's this technical thing that has to happen and that, I see, is the real danger.

Joel: 18:51

Well and it seems like that's part of the bias too is that that's the only way it could happen, and it just has to happen that way.

Joel: 18:58

You know, I've, you know, I feel like there are moments where we live in a culture now where it's easier to imagine terraforming Mars than it is to, like you know, change that myth of maximizing. I don't know, can you speak any to that culture, or the sort of the ideology or just kind of the bias that goes along with that, of feeling like there really are no other options.

Marjorie : 19:24

Yeah, there's a statement that it's easier to imagine the end of the world than the end of capitalism, and that is so. Many of us have this notion that it's just too complicated, it's too powerful, there's nothing we can do about it. You know, let's just try to mitigate the edges a little bit with some regulation, but we can't do that anymore because I think the beast has gotten too big. It's five times as big as it's like. The house plant that, you know, doubles every year. Now it's five times as big as the house.

Joel: 20:05

Too big to fail. Yeah, I mean we have that as part of what we say when we talk about this. It's just it's too big to fail, it can't.

Marjorie : 20:12

That's right and so, and this is why I say, let's just, let's begin with seeing, let's just see what's going on, because you begin to recognize that really, where capitalism lives is in our minds. You know, you could take out every hedge fund manager, every CEO, you know all the big capital players. If they were abducted by aliens tomorrow, other people would just step in, the system would reconstitute itself. So it's this idea that this is how you run, this is how you run an economy. And once we change our minds about that, when we start to say, hey, you know, there's another way to run an economy, that's the beginning of the end of the system.

Joel: 20:55

Yeah, and you know one thing, one stat that you pointed to, that I think is really telling of all this, because a lot of times when we think of the people who do become billionaires, we think of the CEOs, we think of the people who you know at least in theory, worked their way up to the top, you know, overcame obstacles, grew the company and they're being rewarded for the value that they created.

Joel: 21:17

But you pointed out that, even more than CEOs, there are more billionaires who are hedge fund managers than there are CEOs. And the purpose of a hedge fund, you know, when you get right down to it, is to take someone who's already wealthy and make them wealthier, or take an institution that's already wealthy and make them wealthier. And to me, like you could say, that's adding something to the market. But you know what is it adding to society? And I guess you know what. Do you think that says that now, one out of five billionaires are people who helped other billionaires get richer?

Marjorie : 21:51

That's right. Yeah, well, those are the people who are really holding the system in place and profiting from it. You know, there's one hedge fund manager I looked at. He makes roughly a billion dollars a year. That's just his income, and we don't question where does that wealth come from?

Marjorie : 22:13

This is the part that I'm trying to point to in the book, one way that private equity and hedge funds can operate like private equity. Hedge funds can do whatever they want, basically, but private equity is out there. There's also a lot of billionaires there. They're out there buying up companies in a particular industry, putting them together and basically creating monopolies. That's their business model. And so, you know, we have this idea that we're going to limit monopolies with this end-to-pipe solution. We're going to break them up if they get too big. Well, meanwhile, our institutional investors are systematically creating monopolies as a business model, and that's one of the ways that these asset managers are becoming so fabulously wealthy. So the whole thing has become very insidious, but so many of us we kind of don't speak the language of finance. We don't really see what's going on?

Marjorie : 23:11

And so it's hidden. You know, I say in the book that it's a new form of colonialism or imperialism, and the empires of today are portfolios of assets which are vastly larger than empire at its peak. I mean at its peak, europe owned 85% of the land mass of the world as colonies and possessions. Well, right now, portfolios of assets own five times the real economy, all the GDP in the world, five times, and it seeks to grow a maximum amount every year. And this is why I say, joel, and so many of us say it's not just me saying it this is why we need system change. You can't just regulate this thing at the margins. We need a different kind of system because it's very unsustainable and it's very precarious.

Joel: 24:14

Yeah, you know you it's, it does it can get overwhelming. And I guess I'm curious because there are some other things I want to dig in with. But I imagine there's someone listening right now who's probably thinking like oh you know, marjorie, here she just. She hates business, she hates profit. She doesn't she wants everyone to you know, to live off the government. She wants everyone to you know, kind of you know be be completely equal, regardless of how much they contribute.

Joel: 24:38

You know all of these kinds of things I guess, what would you say to people when it comes to the difference between making a profit and maximizing a profit? Sure, or how would? How would you respond to that general, that general sentiment?

Marjorie : 24:49

Well, first of all I say that I come from a business family. My, you know, my grandfather founded Anderson tool and dye in Chicago. My father had his own small business. When he died, I was charged with with selling his business. I ran a small business for 20 years. I started it and and ran it, and I Like to say that I became devoted to revenue. I wanted to run a cool company and you know and do cool management techniques, but what I realized is that if I didn't have more money coming in and going out, I didn't have a business at all. This was a magazine and so we became devoted to, you know, sponsorships and advertising and subscriptions. But also we had limits. You know, for example, we didn't take ads from defense contractors. We were an ethics magazine and defense contractors had really Notable ethics programs but we didn't take their sponsorships.

Marjorie : 25:46

So you um, I Talk in the book about the difference between being profit-making and profit-maximizing. Now let's look, for example, what that means at a nursing home. Right, you can have nursing homes owned by families owned locally that I mean. My mother was in one of these and you know tremendously caring people running this, this place, and of course they had to make a profit to stay in business. But then when nursing homes are sold to private equity which many have been they extract more profit.

Marjorie : 26:21

By cutting staff, by reducing services, you have more research shows the evidence here. You have more patients who get bed sores, you have people who are not Attended by by the staff because the staff is so overworked, um, and you have more deaths at these. A lot of the deaths during COVID-19 were at nursing homes Controlled by private equity and these are sometimes sold Multiple times in a week, so it's hard to even know who's owning it and who's to blame. So you know, making a normal profit in a normal business is fine, but maximizing extraction is is is Is dangerous and harmful and and this is a key distinction we need to learn to make.

Joel: 27:09

Yeah, because it's a you. You summed it up this way you said it's a, it's a commitment to value, not values hmm, well, that's what.

Marjorie : 27:19

That's what one know one investing firm says are, you know, we're commitment to, we're committed to value, not values. We want to increase value for our clients. And you know what they were saying was um, you know, we all have, we all hold individual values, but you know, unfortunately we can't bring that to to this business, because we're in the business of creating value for our clients. And so this is one of the ways that the system normalizes itself and it says you know, we have an ethical obligation to increase our clients value of their assets and and and.

Joel: 27:56

This is that myth of fiduciary duty that you mentioned.

Marjorie : 27:59

The myth of fiduciary duty that we're legally obligated to do this and this is how we we honor our ethical Commitment to our clients. Well, fiduciary duty, yes, you have to be prudent with assets, you can't be reckless with them. But fiduciary duty has this hidden other element which says Gains to capital matter, nothing else matters. So if Exxon mobile destroys the planet but it drives up shareholder value, the system is is behaving as it, as it should. And this is why, you know, we've taken the normal functioning, having investment returns, having profit and we've taken it to this logical extreme where it becomes a dangerous force and in it and it's it's creating monopolies that hobble family businesses, it's these companies are evading taxes. They often will relocate to a foreign country simply to to Relocate their headquarters, simply to evade taxes. Massive layoffs used to be rare and now they're common. You know, sending jobs overseas, and now we're going to see artificial intelligence do away with more jobs. So this, this normal process of making a profit, becomes Really dangerous to the whole society.

Joel: 29:25

Yeah, and you know you mentioned kind of the normalization of it. What I did love also about your book and you know kind of what a lot of Kind of the reason I started this show was because I wanted to be able to highlight the ways that people are going about business, whether it's through social enterprise or whether it's through worker owned. Businesses, whether it's through local investing rather than Wall Street investing.

Joel: 29:51

There are these? There are these examples that happen, where that points out it doesn't have to happen this way. We don't. There isn't only one option. There are actually more options of how we could do it and there are models that work. You talked about a company I'm forgetting the name of it off the top of my head, but I think it was a dance Apparel company and the owner then set up a community land trust in somewhere in South America. And you also talked about at a conference you did in Boston, where you really went through all of these different models of ways that people are doing that differently, and I am curious a little bit about that. I know that we need to acknowledge the problem and kind of look at that systemic change, but I'm curious if you can touch on any particular ways of doing things that have really yeah, really impressed you.

Marjorie : 30:42

Sure, sure, yeah. So at the Democracy Collaborative, where I'm a fellow, we talk about the democratic economy and we look at various models like worker ownership or public ownership and control of water, or community land trust, where the community owns the land and people own their houses on top of it. These public banks, credit unions these are more than just examples that are isolated. They're really the emergence of a new paradigm, a new paradigm for how to organize our economy so that people and planet are at the heart of it and not the maximum wealth for a Chinese elite. And they're proven models. So here's one I love to talk about. It's Recology. This is a garbage collecting and recycling company in San Francisco. It's over a billion dollars in revenue. It's a big company. It's 100% owned by its workers and garbage truck drivers there make $100,000. Because if you're not extracting a lot of wealth for absentee shareholders, there's more to go around for workers. Cooperative Home Care Associates in the Bronx it's owned by 2,000 mostly Latina and black women who are the home care workers and they own this company and the company well. It can't pay super high wages because of the government regulations that control reimbursements, but they try to have good scheduling and good relations with workers so they can talk back to management through a labor management committee. So there's some very successful models.

Marjorie : 32:36

At the Democracy Collaborative we helped to develop with the Cleveland Foundation, the Evergreen Co-ops in Cleveland, and there's a large commercial laundry 200 workers, many of them formerly incarcerated, primarily people of color, and doing all the laundry for Cleveland Clinic. They do such a good job that they got the full contract and this is a place where workers will get a bonus at the end of the year. Maybe it was $8,000 one year, it was $11,000 another year. They own this company, they get the profits and you're working at a commercial laundry $11,000, that's real money that can help you send a kid to school, that can help you make a down payment on a house or buy a new car. So these work and I know that neighborhood economics is going around different cities and convening these kind of players, and so we also believe in working locally and growing this new economy from the ground up, from particular places, and there's a form of local economic development that my colleagues developed. It's called Community Wealth Building and this is what we were doing in Cleveland. They had inspired other work in Preston, england, where the city council took this up and they actually moved the needle on unemployment and living wages in that community, and this was a broken down Rust Belt community.

Marjorie : 34:16

Not long ago Preston was named the best place to raise a family in the UK. This was Community Wealth Building in action and my colleague, neil McEnroy, helped to develop that. We brought him on a couple of years ago. He is advisor to the government of Scotland and the entire country of Scotland has now taken up Community Wealth Building as the model for local economic development. Every county in Scotland is drawing up a Community Wealth Building plan, so this is a form of local economic development that's catching on across the US, around the world. We're working with Chicago, los Angeles. You know we're having to run hard to keep ahead of it. Communities are in trouble. Their people are in trouble. They know there's something about this economy is not right and they're looking for alternatives, and I think what neighborhood economics is doing is talking about alternatives. Community Wealth Building is kind of a sister initiative, showing also how this can work.

Joel: 35:27

Yeah, and I love the way that you frame it. Kind of the dichotomy that exists that we can look towards is either an extractive economy or a democratic, regenerative one. You know, like the example of worker owned businesses or worker owned co-ops. There's a lot of business owners that are hitting retirement age and if they pass that business on to their kids, maybe their kids don't want to run it. But what we do, what we see, is usually by the second or third generation that has gone out of business and that legacy has disappeared. But when it's actually sold to the workers and then there's democratic control, it doesn't mean that there's no more investment.

Marjorie : 36:05

There's no more, you know expansion of that business.

Joel: 36:07

It doesn't mean that that business doesn't grow anymore and that the workers just take everything and run. But it means that when there are profits, that the decision of how to spend those profits is made by more than just one person. And it does seem strange that we live in a kind of a moment where we think that democracy is good and we want to spread democracy in the world except for in the thing that kind of runs our whole life, which is the economy.

Joel: 36:37

And so, you know, is it just that people think too narrowly about what business can be and it must that maximizing that it's kind of. It's such a narrow focus on maximizing, and maximizing only because it does seem like what these democratic organizations do is they take into account the people that get left out. And you talk quite a bit about kind of who gets left out in the current system.

Marjorie : 37:03

Right, right, you know, joel, I love employee ownership, worker ownership. I worked for that for many years and our organization, democracy Collaborative, helped start the Fund for Employee Ownership in Cleveland. It's starting businesses is hard and risky, but if you buy an existing successful business and then convert it to employee ownership, that's a much faster way to grow employee ownership. And there are more than a dozen funds around the country that are employing this technique. A&h Legacy Fund is doing this particularly to benefit workers of color, and they do that by buying companies in industries that employ primarily people of color.

Marjorie : 37:50

So it's a very powerful model. It's been around for decades. It's the only model I know of that's been favored by both Ronald Reagan and Bernie Sanders. So worker ownership crosses the political aisle and I think it's one of the models that could really advance, no matter who's, no matter which party is in power. But you know. So I started, joel, by talking about how I wrote the book, because I'm discouraged and because I have seen some of these countless models like this not growing, not really taking the world by storm, which they should. Worker ownership workers in worker owned firms have, on average, about $160,000 or $180,000 of wealth when they retire from that company, I mean most people have nothing when they get to retire.

Marjorie : 38:45

So this is you're talking real money. These are businesses that they can be somewhat more profitable. They pay wages that are about 30% higher. They are less likely to go out of business in a downturn. They are about 1 fourth as likely to lay off workers when times are hard.

Marjorie : 39:04

So you know, we're taught that new economy models, democratic economy models, they're small, they're inferior. You know they're substandard. You don't take them seriously. It's very much like what used to be said about women Women are hysterical. You know they can't be trusted, they don't have any real power. It's what was said about black people there an inferior race. They deserve to be ruled. So you know the people in power. There is this tendency to denigrate the alternative and we have to not take that seriously. We have to recognize that democratic economy models are in fact superior If measure of success is human well-being and not maximum extraction.

Marjorie : 39:56

Water, for example, 85% of Americans get water from a municipally owned utility. You know that's public ownership. We're taught to fear public ownership. Right, that's communism. Well, you know. No, it's your mayor. If there's something wrong with the water, you can call up the mayor and get it resolved. You're not dealing with some distant corporation. The same thing is true with electricity About half of Americans get their electricity from municipal utilities, which have been shown to provide better service at lower rates than investor-owned utilities.

Marjorie : 40:36

And I'll give one more example, and that is forests. 15% of forests around the world are right now under-controlled by indigenous peoples or communities, and the UN has said that this model is critical if we're going to preserve endangered species. There was a UN report that said this, and so there's. All of these models are proven, and yet we're taught to fear them, we're taught to denigrate them, to look down on them. That's bias. That's bias at work that says no real men maximize their profits, right, everybody else is a sissy, these are businesses that you don't take seriously. Well, that's bias, and we just need to say no, that's not true. I don't believe that. Yeah.

Joel: 41:25

Well, I think what we're talking about ultimately is change, and it is changing. When I think about as someone who's done some mindfulness training and some meditation work and all that too, you kind of learn the idea of as within, so without. And I think about personal change and times in my life where I was kind of shooking up by a mentor and told look, if you don't change something about the way you do things, your life is not going to change and it's going to keep staying on the same course that it is. If you want things to change, you will have to change the way that you do things and there's a cost to that.

Joel: 42:02

There's a cost to changing, but there's also a cost to not changing. And once I got to a point, personally, where I realized the cost of not changing is outweighs the cost of changing. That's when I actually started to make a change, and so with the last kind of few minutes here, I'm curious to your perspective on what are the costs of changing the system. But why is that worth it?

Marjorie : 42:29

Yeah, I think that the first cost, if you want to put it that way, is just fear. Right, it's easier to sort of hold on to what we know than to let it go. I mean, remember when we first learned about climate change, which is a huge, big problem, it seemed very technical, it seemed very scary, very hard to understand. But once we got our head around it, there was this feeling well, what's the alternative? We're going to freeze in the dark. And then we learned over time no, there are pathways. We can insulate homes, we can have electric vehicles, we can wind and solar and so on. We began to see no, there actually is a pathway and it's better. I mean, there's solar and wind, or I think, or now lower cost, or will be soon. And so I think it's the same that it feels scary. It's like how on earth can we change capitalism? How on earth can we get beyond capitalism? Well, we can. There are other models and they are superior. So it'll take time and there's no straight line from here to there. And I think this is what it's hard for us to get our minds around. We can't really see how we're going to get from here to there.

Marjorie : 43:47

I do talk about pathways in the book, but we're in a time of breakdown. We're talking about a massive shift of civilization, of values and norms and institutions, and we don't need to create the conditions for the breakdown of capitalism. It's doing that itself. It's not sustainable, and so the breakdown is being caused by the system itself, and so I think what we can do is band together. This is the most important thing, joel, and this is what I love about neighborhood economics and our work in community wealth building. We can begin at the local level. We can get together. We can begin to say we can grow a different kind of economy at the local level. We can invest in different ways. We can find models that actually could advance, like worker ownership. We can practice debt forgiveness. I talk about successful ways to do that. There are lots of things that can be done now that point in the right direction, so that these models and this understanding is there when the moments arise for people to reach for something new.

Joel: 45:10

Yeah, I think that that coalition building is one of my favorite things about neighborhood economics because at the end of the day, when you're talking about a system change, no one person can change it. We're not going to.

Marjorie : 45:19

Yeah, that's right.

Joel: 45:20

You're never going to elect someone or put someone at the top of a company or a board and then they're going to be able to change a whole system. But it has to be. Any type of large scale change requires collective, large scale working together, because alone we're going to beg, but together we can at least bargain.

Marjorie : 45:40

That's exactly right, and I think it starts just simply by talking to each other, like what we're doing right here. We need to normalize this, we need to educate ourselves, we need to begin to help each other understand hey, financial abstraction is a problem. There is a different way to run an economy and that needs to become as normal. We've normalized climate change. We can talk about that in everyday conversation. It's not that technical when you start to understand it. An economy for ordinary people, not for a financial elite. So talking, that's where we start.

Joel: 46:19

Yeah, when you start to realize that at the end of the day, this to me seems just like risk mitigation, like if you're a part of something that's not doing what it needs to do and is starting to crumble and fall apart and cause all these problems, you want to mitigate that risk for the long term Because it's not about. It should be less about what returns do I get this quarter or this year and more about what impact is what we do now having on generations two, three, four, seven generations from now? And that's what I loved about your work is it seems it's so focused on really the long term thriving and stability of human beings, of people, of economies and of businesses.

Joel: 47:04

Rather than just so focused on that here and now. Short term, what can I squeeze out of other people and out of the system to get what I need for today?

Marjorie : 47:15

Sure, sure, that's right, and I just want to emphasize that I'm a journalist and a theorist, but what I'm writing about is the work of hundreds of visionaries who have really worked these things out. So I'm really just shining a light on the work of so many geniuses and visionaries, because it's going to take so many of us, but this work is farther along than people realize.

Joel: 47:42

Yeah, Well for everyone out there, please pick up a copy or listen to a copy of Marjorie Kelly's Wealth Supremacy. Check out the Democracy Collaborative and all the work that they're doing. Make sure also to check out Neighborhood Economics and you'll be able to listen to the back episode of this show, as well as plenty of other great conversations we've been having recently here on the Mindful Marketplace. Thank you so much, Marjorie, for your time today. Thank you for your work and for the writing and the research and the time and the heart that you have put into this. I cannot say how grateful I am for that. You are doing what you're doing.

Marjorie : 48:19

Well, Joel, I'll say the same with you. Thanks for having me. This has been fun.

Joel: 48:23

Thank you.