Transcript of Episode 85 – Gar Alperovitz on Reinventing Our Systems

The following is a rough transcript which has not been revised by The Jim Rutt Show or by Gar Alperovitz. Please check with us before using any quotations from this transcript. Thank you.

Jim: Today’s guest is Gar Alperovitz. Gar is a founding principle of Democracy Collaborative and has had a distinguished career as a historian, political economist, activist, writer, and government official. He has served as a professor at the University of Maryland as a former fellow of Kings College, Cambridge University, Harvard’s Institute of Politics, the Institute for Policy Studies, and a guest scholar at the Brookings Institute. He is also president of the National Center for Economic and Security Alternatives. Hi, Gar. Great to have you on the show today.

Gar: Good to be with you, Jim.

Jim: We’re going to explore Gar’s ideas about potential paths forward towards systemic change in our political and economic systems. Much of it’s going to come from his very readable book, What Then Must We Do? A book I’d suggest folks that find this podcast interesting ought to check out. As usual, we’ll have links to the book on our episode page. And when Gar says systemic, he means it. The word system or systemic appears 299 times in the book. So Gar, let’s start with, what do you mean by the system? And what scale are you referring when you say systemic change?

Gar: Well, thanks. I didn’t realize the term appeared that well, that many times. Thanks for checking it, Jim. Well, let me say this. I’ve worked in the House and the Senate as a kind of policy director and also at very high levels of the government state department doing policy. Policy assumes the existing institutions in the United States that’s dominated by corporations, and to a lesser degree, by nonprofits like universities, and some hospitals, and many nonprofit organizations, and labor unions. Those are all institutions.

Gar: A system, a political economic system, is comprised of the mix of the different institutions. So, for instance, traditional what we call communism or state socialism or non-democratic state socialism, the government owns the economic institutions and that’s the kind of fundamental design of the system. There are theorists that’s never seen much of, except in Yugoslavia briefly, who say systems ought to be built around the workers owning everything as worker owned companies. Those institutions would be at the basis of the system.

Gar: Traditionally, in the United States, the system is corporate capitalist in nature, but heavily organized with unions, which are institutional part of the system design. And they have political economic power and they help create legislation. So that’s a social democratic or welfare state systemic design. So you begin to see the pattern who owns and who controls and what are the power relationships for different kinds of institutions. And one of the arguments is we are now entering a period when long decaying, economic, social, ecological, and other trends. And by comparison with European nations, very, very limited weak trends on almost every indicator of the United States as well below many European countries.

Gar: That systemic design that we live in and take for granted is more and more in question historically. It’s not producing the economic ecological distributors outcomes, even liberty outcomes compared with the goals and values that people urge for that pattern of institutional putting together into a systemic design. So it raises really traditional questions, and they’re very modern questions because technology has changed so much. And you want to put it this way, if you don’t like state socialism, and if corporation dominated, capitalism has more and more flaws, particularly as it’s counterweight in unions, but the counterbalance or countervailing power, as John Kenneth Galbraith called it, declines to almost nothing in the United States.

Gar: The labor unions in Sweden to balance off the Swedish system in its systemic design, where 80% of the labor force, both economically and politically in the United States that never got over 34% in the private sector. Now they’re down to 6%, so a very weak institutional balance compared with corporate power at 6% now, it makes for a very, very odd and kind of unwieldy systemic design in which corporations have far more power. And of course, in the United States where the working people are split by race, it makes for a divide and conquer politics.

Gar: And one final thing I’ll throw in, and then we can have a long discussion, the other part of the system design in the United States and people don’t think about it, or they take it for granted is very, very large geographic scale, which has political implications. Madison, James Madison, thought big scale was great because you could divide and conquer the working classes. He was very blunt about it. He thought if it went too far, you get tyranny, but by and large, it would allow the elites who at the outset of the American experiment were the only ones, only property holders could vote. And he was very clear about it. The divide and conquer was an important strategy so that folks who didn’t have any land or economic power wouldn’t be able to organize very well.

Gar: He said it could good go to tyranny if they went too far, but he thought if we could keep a nice balance, that would keep things in hand in democracy. Well, the continental system, it’s a big one and it makes for an easier division leaving aside the very strange design that gives a state like a political economic design, systemic design gives a state like Montana or Wyoming with 600,000 people of the same power in the United States Senate as a state like California, with 30, 40 million people, depending upon the estimates where they will be at the next stage. It’s very, very large, and the same number of senators.

Gar: So these are all elements in how the economics and the political structure of the overall systemic design are organized and who they benefit and what results you get and what the trends indicate or the outcomes of different systemic designs. So I’m opening up a lot of big questions, I know, but we have a whole project that looks at and has been writing papers and having conferences at Harvard and MIT and the University of California, University of Wisconsin on systemic design as a major question, as we go further and further into the century, and as we have more and more problems that don’t seem to be solved by the current design.

Jim: Yeah. So I’ll point out to our audience. There’s a nice summary of that website, a lot of good stuff there. And I think that’s associated with your efforts as well, if I’m correct.

Gar: Yes, it is. I’m co-chair of that project.

Jim: It looks extremely interesting. I’m involved with a project called The Game B effort, which is also looking at a systemic redesign of our social operating system. It comes from a different perspective, but I’ll mention Game B a couple of times along the way, probably, to compare and contrast. Though, actually, as I read your book and read a lot of your materials, I think there’s more compare than there is contrast. Very similar. I think we’re both very interested in a bottom up, top down simultaneous reworking of our systems and you call it out. Our systems are not working. Some people call it legitimacy crisis where literally more people every year are prepared to walk away from the system.

Jim: One of the things I was going to point out, in fact, I will point it out, is that your book, What Then Must We Do, written, I think, it was in 2013, had a series of possible options for the future. And one of them was so-called option four, which started off as it’s also possible that the growing social and economic decay will lead to one or another form of violence on either the left or the right or both. Well, it seems like we’re there right now. Both sides are out in the street and at least at a low level starting to kill each other. So the number of people that are no longer willing to proceed by normal political means seems to be growing by the day.

Jim: In addition to your state socialism and financial corporate capitalism, I’d also throw out a third system that’s being tried, and that’s the Chinese neo-fascist system. Kind of ironic, they originally were Marxist Leninist, but if you line up where they are today, they look a hell of a lot like a neo-fascist system, combining state capitalist cooperation, militarism, racism, authoritarianism, et cetera. So I think that one’s actually another challenge in our face that if we don’t get our act together and if we continue to decay, it may well be the Chinese neo-fascism could be the dominant system in the world.

Gar: That’s exactly right. They took their model from Pinochet’s Chile. They liked the design that he was designing large corporations plus fascism basically. And they studied that Chile and were very admiring of it. And then they put some the fringes and the details into it, but that’s where they got their model.

Jim: Yep, indeed. And talk about this crisis of legitimacy, no surprise. As you said, real wages for 80% of Americans have hardly gone up in the last three decades. I actually did a little look on it in some statistics I have access to, and it looks like the top 1% has tripled since 1970, and the top 0.01% has grown by 8X. No wonder the people are pissed off, right?

Gar: Yeah. And you know, the thing, Jim, that I would think you would agree with this, but I want to make it clear, system design or systemic design becomes very abstract for most people. But in fact, it’s very practical and very common in world history that people begin saying, “Hey, there’s something wrong with the system,” and they begin debating, well, what do we do about it politically? And then there’s a debate about what are the elements. For instance, there’s an awful lot of interest in worker-owned cooperatives as one kind of foundational institution at the grassroots level, or do you want to have municipal utilities to replace private companies that may or may not be polluting more. Or what do you do about the big ones like the Tennessee Valley authority as a regional quasi public entity for regional river management and energy control?

Gar: Things like that become practical examples of how do you think about different systems or neighborhoods what’s called a land trust, kind of draw a circle around some of the land ownerships to prevent excessive inflation of housing costs, and set up a community or a neighborhood owned structure that holds down housing costs. These are very practical elements in a larger systemic design, and it’s always important to get it away from too abstract an idea. We try to operate at the level in our Next System Project, big debate about theory. And there’s a lot of theories of what makes for a better design, what doesn’t.

Gar: But also what can you do on the ground, and point to that is very, very practical. And as a starting point or an element that you can actually show, it would be better than some other elements in a systemic design. So that’s what we’re doing. And that’s what the book you’re talking about, What Then Must We Do, is all about, and other books I’ve written on this subject. And our Next System Project has many, many papers and academic discussions at Harvard and MIT getting very serious about this rather than just kind of one-off discussions.

Jim: Yeah, I think this is a very key part of the awakening process is that people have to understand that our institutional structures are something humans have created. These were not brought down from Mount Sinai by Moses on stone tablets. Every single one of these institutions we has has been either the result of conscious design or a series of evolutionary accidents, and typically a combination of both. You talk about people sitting down and thinking through new systems, the founding of the United States was a perfect example. Go back and read the Federalist papers, the anti-Federalist papers and other works from that era, and you realize these people did a tremendous amount of research in the history of republics.

Jim: And they had seen from history, most forms of republics had not worked. And they tried to take lessons from the ones that sort of worked or worked for a while and combine them to the best that they could, and come up with an architecture, which surprisingly is still working short of 230 years later. Of course, it’s not surprising that 230 years later a constitution that was written, and it’s important to remember when it was written. It was written when the biggest company in the United States at a hundred employees, it was a shipyard in Philadelphia. It was before fossil fuels. The first coal mine in the United States was in 1804, so we were literally living right at the boundary just before the beginning of the modern age.

Jim: And so it’s no surprise that our political institutions are getting very, very creaky. Which gets me to my next point, which you address quite well, and that’s the question about, well, despite its failings and its fact that it’s 230 years old, what about the regular political process? Why can’t we rely on having elections, voting in the congressmen and senators that will do what’s right for the country, as a way to move forward here into the 21st century? You basically lay out the fact that there were two exceptional events in the 20th century that allowed a lot of our pro-social legislation to occur. And those two are unlikely to be repeated. Maybe you could talk to us a little bit about that.

Gar: Yeah. Let’s start at one end. I mean, it’s kind of, some points are really obvious that people know but don’t kind of think about. Big corporations have enormous political power, obviously, so they donate to campaigns, they lobby. I used to work in the House and Senate and the lobbyists come in with the campaign contributions and they come in and wonderfully developed legislation. They say, “Here, it’s already written out. The Congressman or the Senator can just use this material.” They come in with well-briefed speeches written. Then they contribute to campaigns, and it used to be that labor sort of balanced them.

Gar: But as I mentioned earlier, one of the big, big changes is labor unions are down to very minor, minor part of the system now. So they don’t countervail, as what John Kenneth Galbraith used to say, they’re just very weak and that’s a real problem. So secondly, these institutions play a big role in putting forward what we call legislation. They aren’t neutral, the system and the constitution reflects their power. It isn’t like they’re over here and the government’s over there. All political science is about how powerful institutions are in the creation of what the outcomes of the constitutional system is, and also the design of the constitution.

Gar: So that’s what happens then, what happens if the labor unions disappear and the corporations are about all you got as an institutional power? You’ve got an overbalancing and it’s very extreme. And that’s where we are right now. As I said earlier, the welfare states and Scandinavia had 85% of the people in labor unions balancing corporate power. We’re down to 6% and declining in the private sector, 11% overall and declining. So there’s a fundamental problem at the heart of the system. On top of that, as the constitutional rigging that was set up at the early days, which, in the early days no women couldn’t vote and black slaves couldn’t vote. And men without property could not vote in the early days of the American constitution.

Gar: So slowly property got moved out, and then women, and then people who were slaves became enslaved and they could vote in theory, but in practice, they were denied the vote for almost a hundred years after the Civil War through violence and suppression. So the whole question of voting is part of a systemic design as well. But the big ones are institutional. What do you do about who gets to own wealth? Big corporations, should they dominate? Some people have argued. We ought to have a small competitive economic system. The Chicago School of Economics, very conservative, was very, very, for 40 years, was very, very upset by the rise of the large multinational corporation.

Gar: These are conservative economists, very eminent conservative economists at the Chicago School of Economics, because the large corporation would deny competition. They would work out deals with other corporations. They would cut up the market. They were politically powerful unlike small entrepreneurial competitive capitalism. So you find a very strong critique of corporate dominated capitalism, which is where we live now, coming from free market folks in the great conservative school. So that’s a different systemic design. In theory, the old design was a lot of small competitive businesses would keep liberty alive and also an efficient economy.

Gar: But that’s over when the big, big, big companies dominate markets and control a form of competition that doesn’t look anything like free market competition. So if you don’t like the government owning everything, state socialism like communism or the Soviet Union, and you don’t want the corporations dominating everything without, and no labor unions there’ve been destroyed, where are you going to go? And so that’s a real question. It’s just like the time of the constitution. What makes sense? What would be the right way to go? How would you design a system that benefited everyone, but also was very sophisticated about institutional power so that it kept things in balance rather than get swept away by technologies that would promote centralization of corporate or government power?

Gar: And that’s what the Next System Project is about. And that’s what the book you’re talking about, What Then Must We Do, and several other books I’ve written and a number of articles in our project and books coming out of it, having a real debate about the systems beyond the ones we know are in trouble and practical debate and experimentation to get it away from rhetoric to say, I like the term architecture, “What’s the architecture?” The American constitution is a architectural design. What would be a better design in the modern technological era that would preserve … And this is the test, preserve these values: liberty, democracy, equality, ecological sustainability, and maybe even a sense of community.

Gar: What design would produce those results in practice and what do we know about that? And how can we think about it? So that book, What Then Must We Do, is just one contribution to that debate. And our Next System Project is a full scale, as I said, discussion and the conferences we’ve had at major universities and around the country or other contributions. We’re about to publish a big reader on this edited by my co-chair of this Next System Project, Gus Speth, our rather eminent ecologist, who was the chairman, who was also head of the UNDP at the United Nations, one of the big development projects. And he and I run the Next System Project, which has been debating papers like the committees of correspondence.

Gar: And if you don’t like the current system, you don’t like the state socialism, communism, what makes sense? How do we organize the next system in a way that it builds community, democracy, ecological sustainability, liberty? How do you do that? And what’s the design? It’s just like the Federalist papers debated constitutional design, although they didn’t get very far into institutions because they assumed small business and small farms, except in the south where it was all plantations and small farms, so they didn’t get far into economic institutions, many political institutions. We’re talking about economic as well as political design architecture and institutions, a new direction building out to the next century.

Jim: Yeah. Definitely work that needs to be done. I like the fact that you take a pragmatic approach, let’s try some things. Truthfully, I’m skeptical of high theory, and that comes from my study of complexity science. Since I retired from the business world 20 years ago, I’ve been associated with the Santa Fe Institute, and I’ve gotten myself pretty educated on the nature of complex adaptive systems, networks of networks, nonlinear dynamics, et cetera. And one of the things we’ve learned from that quantitative study is that predicting the future evolution of complex systems when you make a change is a hell of a lot harder than people used to think.

Jim: In fact, I love the old John Maynard Keynes quote, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” And I think that’s a warning to us all to proceed pragmatically and by experiment and see what works, but yet still proceed with a plan. And with a, as you called it, a north star in mind.

Gar: Yup. Well, I totally agree. As a matter of fact, I did my PhD at Cambridge at the John Maynard Keynes’s college. John Maynard Keynes was at King’s College and he was a very good investor as well. And he made a lot of money for King’s College, Cambridge, where I did my PhD. But his idea was I thought right, and then he went later to institutional questions. You have to try things, but you also have to have a north star to keep revising the direction as you try, but you can’t avoid the theoretical debate either. You got to do both.

Jim: Yep. In my business world, I used to call it Pikes Peak. I tell people, “There’s Pikes Peak 200 miles away,” no telling what swamps and rivers and hostile Indian tribes are between us and there. But if we know where we’re going and we’re smart and we’re pragmatic and we’re adaptive, we’ll get there. The same is true about the future. Let’s do a little side talk here about unions. You mentioned Sweden. I looked up the data before the show and currently 67% of Swedes are members of unions, much higher than our 6%, down a little bit from the peak of 80 or 85. And it’s interesting, a friend of my wife and I’s, I guess you could call them more or less a Swedish [inaudible 00:23:15]. Very conservative, both socially and economically.

Jim: Nonetheless, he’s president of his local union of firefighters and anyone that would question the union his mind is a mad man, even though he’s very conservative, even in American terms, let alone in Swedish terms. What happened to our unions? As you point out, they were the principle countervailing force, at least during that short period of mass industrialization from, say, 1933 to maybe 1975, but somehow they seem to have been captured by their leadership. They became corrupt. They became much more interested in featherbedding and holding on to jobs rather than co-evolving industry and to a global high-tech future. What went wrong with our unions. And is there any hope at all to recover them?

Gar: Well, first, I think that that generalization is probably doesn’t apply to all the unions because that … It certainly doesn’t apply to all the unions. There were some very democratic unions. There were some better ones, there’s some worse ones. So we’d go into that in some detail. But in a certain sense what’s much more important is they have technology and sectoral change, and trade have essentially eliminated most unions quite apart from the problems you’re talking about within the union structure. So let’s put it this way. You’ve talked about the Swedish unions. They were up at the 80% mark and now down to 62%, that’s a powerful, powerful force to counter balance the corporation when you got that many people in unions.

Gar: The United States peaked at 34% of the labor force organized. It’s down to 6% in the private sector. Six, tiny. 11% if you include the teachers and the folks in the public sector, schools, primarily schools, but the government officials and government administrators. So that, the model of a political economic system in which power is corporation based like Sweden, or like the United States, political power attached to large corporations, implicitly or explicitly, balanced by unions, sort of, kind of, to produce a welfare state compromise, that model was most advanced in countries, the Scandinavian countries. Barry Sanders likes to talk about a little tiny one, which is Denmark, which is a tiny one in Sweden, which is a little bit bigger. It was counterbalanced by strong unions.

Gar: That’s over in the United States. The game is over. And I’m supportive of unions. I’ve always been supportive of it, and I think you need a counterweight. But the fact is they’re down to 11%, 10.8% last time I saw the numbers, probably a little bit different now, and declining. So they are very weak in most sectors. School teachers are perhaps some of the best organized, but in the private sector they’re minimal. And so the corporations have all the clout, all the political power. That’s a different institutional foundation, institutionally, for a political economic system. And it’s very dangerous because it’s not counter balanced.

Gar: And I think, in a sense, Donald Trump represents the configuration of politics that comes out of that or worse. It’s a recipe for fascism if violence occurs and there’s no labor organizing the traditional responses to crush the violence, which makes politics very, very dangerous, leads to corporate states historically around the world to something called fascism or quasi fascism. So unions have been very important in balancing that direction. And it’s very dangerous unless you can develop. And this is where it gets kind of interesting in terms of political, economic architecture and the future. Go back and think about the committees of correspondence and the founding of the constitution. They were debating, well, they didn’t know what to do about the constitution. They had to figure one out. No one had ever figured out a democratic constitution.

Gar: And indeed the what’s happening around the country in many universities and in our Next System Project, people are saying, “Well, if the state socialist model, Soviet Union doesn’t work, if liberalism or social democracy, the welfare state doesn’t work because labor unions are declining, which is the underpinning of that system, where are we going to go? Particularly as technology changes, what’s a smart design. What can we learn from history? What can we learn from other countries? What can we learn from theory? And how do we debate this and how do we get experiments to teach us something?”

Gar: And indeed, that judgment, I say I worked as a very hands-on politics in the House as a legislative director in the House, legislative director in the Senate, policy planner in the State Department, I’ve seen it all from the inside and from the outside in politics, but also as an academic. Well, what makes sense? How do we think this through and put some intelligence to this like the committee of the correspondence? So we’ve been having an ongoing research debate about systemic design, publishing many, many papers at the universities. We’re about to publish a compendium edited by Augustus Speth, my co-chair of the Next System Project.

Gar: We have conferences on it and then we will do pieces of the puzzle. We’ll talk about what do you do about the energy system, or what do you do about the public banks and many, many experimentation and a lot of experimentation with public banks? If you want to see one public bank that most people don’t recognize the public bank, but it has been absolutely gigantic in the current economic crisis, it’s the federal reserve board, which has created trillion of dollars of bailout in order to solve the crisis. So that’s a particular piece of the design that we don’t even think about. It’s been there so long, but it has enormous power in the banking system.

Gar: So if you begin to probe this stuff, it isn’t as complex as it sounds if you just begin to get into it and start reading about it and start thinking about it and having discussions or experimenting locally. There’s a lot of experimentation locally with worker-owned companies. There’s a really interesting model in Cleveland where it’s a neighborhood of about 40,000 people with a neighborhood non-profit corporation, to which are attached worker-owned companies. There’s a electrical installation company for solar installation. There’s one, a big laundry ecological, sustainable laundry. There’s another companies, they’re all worker-owned companies attached to a community-owned non-profit. So that’s a complex mix that produces something that is community benefiting, but also jointly with workers.

Gar: And then if you use the big hospitals like Case Western Reserve Hospital to purchase from this local complex, that stabilizes the local development forum, and it gives you a model that’s quite interesting at the local level in local communities. And the biggest one is in Cleveland is a big one in England that took off even more from the Cleveland model in Preston, England experimenting with new community models from the bottom up. There’s discussion about public banks from the top down and states like the bank of North Dakota. One of the most conservative states in the country has got a hundred year old, publicly owned bank that small business and farmers and everybody else is very happy with.

Gar: And other States in California and Washington State and New Jersey have all got movements trying to set up public banks to help support a new direction. So there’s a lot of practical experimentation. At the same time people are … And let me challenge the word theorizing. They’re trying to look at experience with different models and assess what we can learn from partial experiences, partial evidence of capitalism, socialism, state socialism. What can we learn from those models? Here’s the test. Do they produce democracy, some kind of equality, liberty, ecological sustainability? And are they peaceful models?

Gar: What do we know about different models of systemic design, and how do they measure up against really important values? So there’s both like practical experimentation, and then there’s the question about the comparative knowledge and theory, all of that. And I think that you’re going to see a lot of this happening more and more as the crisis deepens. And as people like Trump illustrate what happens if you don’t take care of systemic design.

Jim: Yeah. I think we’ll get into soon a whole series of these specific cooperative and local ventures. Before we do, I’m going to pop up a little bit. One of them is I’m going to mention in passing. I did the research on unionization before the call, and it turns out the sector with the highest rate of unionization is actually the police. How about that, right? We know that that is not an unalloyed good in all cases.

Gar: Well, there’s an interesting analogy because I’m glad you raised that, Jim. There’s a debate amongst theorists about community ownership and worker ownership as one piece of the puzzle, and that doesn’t take care of big stuff and corporations and regions and state ownership. And the question comes up. Okay, if you believe in pure worker ownership, as some theorists do, there’s a whole bunch of folks say the economy ought to be owned by worker-owned companies entirely. And then you ask, well, how would you like the police force to be owned by the police? And that’s a worker-owned structure, and obviously the police have a different interest than the community, which has a broader interest.

Gar: So we have this counter, we have the kind of balancing of municipal ownership of the police with worker control, attempted control, empowerment of police unions. So a full worker-owned model would be police ownership of the police system. Obviously, that gives you an idea of some of the logical and theoretical problems in any industry. Does the community override? Do you want to have the industry itself controlling? Is that different for little companies or big ones? When do you have to go to a public model? And how do you control a democratic balance of power between the workers, in this case, the police? And the community, in this case, the city, how do you set those balances? So you’ve got both experimental information in many, many countries, and you also have theoretical information about what the logic of it is.

Gar: That’s a perfect small scale example of a the next system problem, an illustration of what you have to think through at every level, from small neighborhoods to police systems, to school systems, all the way up to what do you do about the big corporations or big state-owned industry. Like the Tennessee Valley Authority, which is a huge, huge regional public enterprise for energy that the Obama administration tried to get rid of it, by the way. This is a socialized enterprise in seven states, the Tennessee Valley Authority. And then all the conservative senators said, “No, we like that. Our citizens, the Republicans kept it alive.” So, in practice, all you’d think it would go the other way round. In practice, some of these institutions have support where you wouldn’t expect it.

Jim: Yeah. Good, good cheap power down the Tennessee Valley. That’s why people want it. It works.

Gar: It works. But then you’ve got the conservative Republicans saying, “Hey, keep it there,” and the Obama administration was trying to get rid of it.

Jim: That’s curious. We talk about the scale issue, and then talking about the police union. If you had the police running the police, you’d have a mafia state. In our Game B world, we’ve actually expropriated an idea elsewhere. The Catholics developed it originally called subsidiarity, and it’s kind of central to our thinking. I noticed in the book, the word did not appear in your book. And I have these cool power tools. Let me search the full text of Kindle books, which is kind of cool.

Gar: It appeared in some of my other books, but that, I guess I didn’t remember whether I used it there, but I understand and agree that it’s an important concept.

Jim: Yeah, essentially for the audience’s sake, that’s essentially that says that power should be devolved, authority should be devolved as far as possible, such that, and this is the hard part, such that it is at the appropriate level for resolution of the issues or concerns, right? For that reason, you would not push authority to govern the police to the police. You would push it down one level above that, probably, right. If you apply that concept as a lens, it’s amazing how it clarifies an awful lot of these architectural questions.

Gar: Yeah. I love your use the term architectural, including the qualification that in the police case, for instance, if you push it all the way, you’re going all the way to the police organization. But obviously there’s other value, which is the community has an interest in what they do. So you have to move it up a notch. So it’s not an unqualified wherever the technology suggests because there’s a different lens. You have to look at it in terms of the implications for the whole community.

Jim: And there’s also, multi-dimensions, right? You have one dimension, you want law and order. Another dimension you want it at the lowest possible cost. And the third dimension is you want it to be done with respect for people’s civil rights, right? And there’s a tension between those three, which may actually lead to three different levels of authority and management over the nexus of something called the police.

Gar: This is a great example, Jim, and I’m glad you raised it because what you are talking from the language we use is systemic design or constitutional design. If there’s failings in the larger dynamics of the overall country, such that they produce conditions, which end up electing a man like the current president, there’s something wrong with the design, in my view, and in many people’s view. But leaving that aside, if it produces ecological destruction, there’s something wrong with the design. If it produces a huge numbers of unemployed people and drug problems and criminalization of unemployed people, is there something wrong with the design.

Gar: So if you ask it that way, it can become a very, very clear set of questions to ask what makes sense, not left, right, center, up, down. What makes sense? Including how do you preserve liberty? Those are really the criteria to apply to the question. And then the second question is if you were clear about your design, this is the articles of confederation versus the constitution, the debate in the Federalist papers, what makes sense? What doesn’t make sense? Then how do you experiment? And also, how do you produce a long term evolutionary transformation of the system in the direction of what makes sense? That’s what we’re doing. That’s the Next System Project, and it sounds like it kind of intersects with what you were talking about at the at the institute.

Jim: Yeah. And also in our Game B world. Institute provides the complexity framework, which realizes that the world is very high dimensional, that everything’s adaptive and strategic. Our Game B effort’s a separate effort that then applies those insights and others into thinking about the social operating system for the future. And as we’ll get into here in a minute, I think we come up with some similarities and perspectives. I’m going to read a quote here from your book. You know who the answer is, the audience probably won’t, but then you can tell us who the author was. “I can’t help but believe that in the future we’ll see in the United States and throughout the Western world an increasing trend towards the next logical step, employee ownership. It is a path that befits a free people.”

Gar: I think that’s Ronald Reagan, isn’t it?

Jim: It is, it’s Ronald Reagan. What kind of raven left theory wrote that stuff, right? It was Ronald Reagan. And there’s always been a strong tendency in some parts of the conservative movement towards things like employee ownership and suspicion for large corporations. As you said, the Chicago School, you don’t get much more ideologically conservative than men. They understand that there is a tendency towards rent seeking. What did Adam Smith say? “There’s never a meeting of manufacturers where the main point of discussion is a conspiracy and restraint of trade.” So, Reagan says it, employee ownership. That’s one of the things that you talk about.

Jim: You talk about it in many forms, and I think it’d be useful for the audience to go into some of these forums a little bit and talk about them, then we can talk about some other cooperative, democratically, organized ways of delivering other kinds of services, like credit unions, mutual banks, et cetera. So let’s start with employee ownership of a company. Talk to us about what’s some of the mechanisms exist there. What’s the status of that? What are the trends, et cetera?

Gar: Let me start with the theoretical point that you raised right there at the outset, because I think there’s a major, there’s a very significant role for employee-owned companies. I like to say worker-owned companies because they’re employee-owned, they employ themselves when they own the company. So, it’s a little odd, but let’s start with that example about … Because there’s a theoretical problem right at the heart of what you’ve mentioned earlier. Think about the city government and the municipality, and the police organization. Worker ownership of the institution and enterprise called police force would make it such that the workers in that particular sector, the policemen, would run that game, and they would be independent, and that would constitute certain problems.

Gar: But a pure worker ownership model in the police industry would give over to the workers of that union that total dominance. Now, obviously it doesn’t make sense because the community, as a whole, has a stake in what the police do, and that they set the laws and they set the terms of reference. So a full model would be the city municipal government would control the police, which in theory that it does, but in practice, the police have a lot of political power. So it’s kind of a mixed model and that’s a really good paradigm kind of example of what would you do, for instance, with great big corporations supposing you believe in worker ownership of companies? Do you really want the oil companies to be owned by the oil workers and have a stake in polluting the environment and fighting climate change? Is that the model you want?

Gar: Or community, as a whole, have an interest in that that is greater than the guys who happened to be working in it at the moment, and who never created the oil in the first place? The oil was there for centuries before they got there. We can answer that question, but it’s a good example. These two are really good examples of the difference between worker ownership and community ownership or some kind of balanced system, and the pros and cons of each ones have to be sorted out. And that’s a good system design challenging question that every level of society that needs to be looked at just as the people who designed the constitution began to debate exactly these kinds of questions.

Jim: Yeah. My response to that would be, frankly, it almost doesn’t matter who owns, let’s say an oil company, whether it’s one guy, there are still a few family-owned oil companies, whether it’s a bunch of anonymous shareholders and managed through some executives, or whether it’s worker ownership, an oil company still needs to be bound with respect to externalities. So, that’s a different part of the architecture. We say that the atmosphere is a commons, and the commons is managed by a different group than the oil company. And so in, at least in the models that we’re working on, the commons that owns the air, let’s say, in this case, it ought to be the world’s citizens and their designees, should have to agree to allow pollution into their air. It’s a little abstract, but you get the concept. And so that no single player should be allowed to exploit the externalities without restraint. And that would be an architectural failure if that was in the system.

Gar: That’s a really good example. And let me sharpen the issue from the point of view of the Next System Project, because it’s a really good question and it’s just it comes up in the police case, and it also comes up in exactly the case that you mentioned, the oil industry. In theory, what you said is the larger institution, maybe the community or the countries, should control the oil so that doesn’t destroy the commons in the atmosphere and produce climate change. That was what you said, right?

Jim: Correct.

Gar: I agree with that. But, and here’s the big but, but if the oil is owned by either the workers or by private corporations, in practice, we know that they influence and often overwhelm the community structure through political empowerment so that you don’t get the common result you want by that design. And if the state, if the government owns it all, as in the Soviet Union, instead of the workers or the oil companies, you got another even worse design because the commons, the government or the state, doesn’t give a damn and it pollutes as well in that model. So now you’re up against a really, what is the design in powering the different groups at stake that would actually produce the result you want, which is a fair distribution of democracy and climate stability?

Gar: It’s not as simple. It’s not as simple either/or just the way you posed it. And I think, I’m sure you know that for the work that you folks do at the institute, it gets more complex because it doesn’t quite work so well because there’s a feedback loop between the power of the local corporations of the unions and the government that’s supposed to control them. That doesn’t quite work the way we think it would work. So you’re really up against the next system problem in its most powerful way. What do we do? How do we make it work that would overcome these two problems? And again, police is a perfect example, just like the oil companies is.

Gar: They have a hand in controlling the city government in politics sometimes, or in controlling the people who control the environment in terms of climate change, the oil union, and the oil companies are not independent of that. They try to control the regulatory status. So it didn’t quite separate in the way we think of it. And that’s the democratic theory problem that writ and large that’s, the heart of the system question.

Jim: Right. And in fact, at our very beginnings of our Game B examinations, the first thing that came up in our analysis was exactly what you’re talking about, is that in a way that’s accelerated very rapidly over the last 50 years, the linkage between economic power and political power has now become, or at least until very recently, maybe reversing with this populous trend, but at least until the last four or five years, political power and economic power, very tightly interwoven. And that any architectural design needs to break the linkage between money and politics and the solution we came up with.

Jim: I’d love to get your thoughts on this as a person who’s thought about architecture, is to absolutely ban both political advertising and issue advertising that’s funded by any other source other than what we call political money. Every citizen would get a bank account, and in that account, they’d get a hundred dollars a year. If you add that all up, that comes up to $30 billion. That’s a lot of money for being political. And only that money could be used for either issue advocacy or political advertising. And so then you’d still have the benefits of incremental voting with money, and yet nobody would have outside impact on the political process.

Gar: So, what’s interesting about what you said, let me go to the abstract question and then the practical question, that’s a particular design and that’s what the Next System Project is all about. How do we evaluate different designs? Would they or would they not produce the desired outcome? And that’s the kind of thing we do in the Next System Project. What would we actually work in practice? So, let me go to the substance of that. It isn’t entirely clear to me that if you did that, it certainly would increase citizen health and citizen participation and it would help, I think. I would support what you’re saying.

Gar: That said, as someone who has worked in both Houses of Congress and in the executive branch, the power institutionally day by day by day, minute by hour by hour of lobbyists coming up day by day by day bringing new plans, writing the legislation, targeting money into the different political realms, is a institutional force that manages the leverage of the money. So it’s not quite as abstract. If everybody had money to contribute, that’s one thing, but the institutional power of how they utilize political power is associated to like the oil companies and the oil unions, by the way, and the police unions even if people have money to contribute to campaigns. So the mechanism you had described, without saying how you come down on … I think it would be a positive, but there are underlying institutional forces that might undermine that mechanism. So now we’re right in the middle of the system project debating exactly-

Jim: Exactly.

Gar: This is the debate at every level. What would work?

Jim: And of course, to your point, yes, you’d have to also ban the oil companies from funding from corporate sources, citizens, united style.

Gar: Now the question is who’s the U would have to, and how do you control the U? Who is that actually in practice? It becomes a question.

Jim: Yeah, but again, that’s another question, right? That’s the democratic constitution, et cetera. By what mechanism does this get done?

Gar: Yeah. And how do you ensure that the U is a democratic U, because there’s an awful lot of … When I worked on, as I say, on the Hill and the House and Senate, the oil companies would come in with the lobbyists in three piece suits and tons of campaign contributions and lots of well-designed legislation already worked out. You can just use it tomorrow with a speech attached to it, and, “Here’s a draft, Senator. Why don’t you use this draft? You’ve read it anyway.” It’s much more detailed and complex when you actually see it in practice.

Jim: Yep. Again, that’s why you’d have to ban them from doing that, right?

Gar: Who’s the U?

Jim: The political system, i.e. legislation.

Gar: Who designs the legislation and who enforces it? That’s a problem because you get back to the same people that are going to say, “No, we’re not going to let you pass that legislation.”

Jim: Now, that’s the problem, of course, and why it may or may not be feasible from a purely democratic perspective.

Gar: That’s the problem. What is the [inaudible 00:50:55] that would allow you to do these things at every level, rather than wouldn’t it be nice if …

Jim: Yep. If I were the dictator, I could do it this way. Of course, it would never end there. As we know, dictatorship never ends well.

Gar: Exactly. So you’re [inaudible 00:51:10] back to all these wonderful questions but there are answers to it, a lot of experimentation, and I don’t want to make it overly complex, and you can see it in your own city where there’s citizen action begins to get in into the picture. So theoretical problems, practical problems, and those experiments in everyday life.

Jim: Talk about some of those experiments. You’ve mentioned a whole bunch of them, things like, again, different forms of worker-owned enterprises. Co-Ops for instance, we looked at co-ops quite a bit. In fact, my wife and I are a member of three co-ops, two agricultural co-ops were farmers amongst other things, and we belong to a food co-op as an example. And then we’ve also looked into, and we think this is perhaps a wave of the future worker-owned co-ops that have financial structures. One of the things that’s held back worker-owned co-ops historically has been relatively difficult to aggregate very much capital.

Jim: So it’s okay for a relatively low capital intensity business. I think one of the examples you gave is actually a good one. Senior care co-op owned by the people who deliver the services, but even at the level of a grocery store or the amount of money necessary to launch that food co-op really forced them for it to be a purchaser co-op, which in my mind, is quite a bit less empowering than a worker-owned co-op. And to be able to do worker-owned co-ops, you need a hybrid financial structure. Unfortunately, there’s work going on there, which allows low to moderate rate of return capital invested, typically as data preferred stock, while still keeping the one employee, one vote rules for the co-ops so that you can aggregate enough capital to actually do a worthy business like a grocery store, or let’s say, an industrial commercial laundry service, et cetera.

Gar: Well, it’s a good question because I’m originally from Wisconsin, which is, there’s a lot of co-ops in Wisconsin, agricultural and other co-ops of various kinds. And we’re now talking primarily about worker ownership co-ops rather than a consumer co-op or kind of credit union, which is another form of co-op. The fact is, historically, it’s been all that impossible to get beyond one or two or three or 4% of the labor force in worker-owned co-ops of any kind. That’s just a fact in history around the world. So there’s a real question of how far that particular design can go. That step one.

Gar: Step two is worker-owned businesses, and there’ve been a number of studies, we’ve accumulated 30 or 40 studies on this, tend to produce, unexpectedly, attitudes that are quite kind of politically conservative, like against social program. They generate because of the businesses. And consumer co-ops are a little different, but worker-owned co-ops tend to go back to, well, we’re a business, we’ve got to fight for a business place. And in practice, the studies that have been [inaudible 00:54:10], by and large, and I want to say by and large, because they’re not that many, but they tend not to go in the direction of cooperation as a public value, but rather how do you preserve businesses as a business value.

Gar: So that’s just the fact of the design produces that outcome so far as we know in general. So then the worker co-op becomes a form of essentially one person, one vote capitalism. And as the model, even though it’s called the cooperative in terms of its political attitudes structure, external to the world, which is quite surprising, we’ve had someone who surveyed the last 60 or 70 studies of this, and that turns out to be what we’ve learned so far. That doesn’t mean more complex models. Mondragon in Spain is more complex model, which subsumes worker ownership within a larger communitarian structure with a different, in this case, Catholic theological base, might produce a different internal culture.

Gar: But in fact, the model that you were talking about so far as we’ve been able to see, it doesn’t produce the result that we would like to see. Coming from Wisconsin where we all have lots of co-ops, I like co-ops, but I don’t see them … Worker co-ops, and even though I support them in wherever you can do it, I don’t think there are systemic direction for the whole system.

Jim: Yep. That’s probably the case. And again, one of our theories is that unless there’s other countervailing forces, people operate in their own self-interest. So, if you’re a worker co-op embedded in a doggy dog, capitalist culture, then either you behave in a somewhat doggy dog fashion, or you get eaten.

Gar: That’s right. And that’s the problem. That’s the problem of the market system.

Jim: That’s what we call race to the bottom dynamic. It’s not necessarily the market system. Yeah, market systems have some attributes of that, but there’s any kind of race to the bottom dynamics. I’ll give you another example of a race to the bottom dynamics, which isn’t really a market driven phenomenon. And that is when the big companies like Walmart play two towns off against each other on where they’re going to locate the next wareHouse. In fact, the little town where we spend some time, it’s about an hour from our farm, we have a little condo there, they got snuckered by Walmart, big time.

Jim: They played our little town of Stanton off against another town Waynesboro where this distribution warehouse was going to be. And they got a 20 year tax abatement. Walmart, one of the biggest company in the world, I guess, by some measures, not by market cap, but by a number of employees, et cetera, they got a 20 year tax abatement from a not very prosperous, small town in Virginia by being played off in a race to the bottom dynamic against one of their peer towns down the road 10 miles.

Gar: Right. When we open these questions, from our point of view, these are system design questions. What do we know about, what can we learn about this? What do we learn about these dynamics? Even in the case of cooperatives, which I’m starting to prejudice in the favor of cooperatives in principle, but we’ve been studying them rather closely. And the results are not quite what you would expect. Either they don’t scale or often they run into some of the dynamics that the market forces on them.

Jim: What are some thoughts that you all have? Let’s address that problem. Just think out loud here, and maybe thoughts that you guys have had about, let’s just say we have a worker-owned cooperative or any kind of business, actually. How do we get around this race to the bottom dynamic?

Gar: Well, the models that I’ve been interested in, and I haven’t seen too many perfect ones in practice, but the original model that was being developed in Cleveland was a community-wide non-profit corporation, one person, one vote in a neighborhood of 40,000. Non-profit corporation, to which were attached worker-owned companies, subordinated to the non-profit corporation. And the theory was that, in practice, the workers would be able to organize politically as well as institutionally, but they would be countervail, to use John Kenneth Galbraith’s idea, by a community representative structure in representing the whole community’s environment.

Gar: For instance, the whole community’s interest in kind of good health of the community as a whole of a variety of community, where the jobs would be placed. There would be a community interest, but there would be some sort of countervailing balance. Now, that model in practice, and particularly in Cleveland, turned out to be in practice, it ended up more worker ownership model than what I just described in practice. But the model in theory that we’ve been looking at for futures, how do you give … Where and in what cases do you want community controlled …

Gar: Police is another example, obviously. Would you want a police union to control the police business? No. Obviously, no. You want the police business to be subordinated to the non-profit corporation we call city government that cares the interest of the whole community in line, and keeps the police subordinated to that in their business so that it doesn’t overwhelm the whole community. So that balancing problem is really important. And then there’s a secondary feedback loop and you see it everywhere. You see the police unions operating, they become big in the politics of the city. So they come around and say, “Well, you may control us at the city government level, but by and large, we’re going to elect the guys we want and we’re going to influence them and contribute so they don’t control us the way you want to control us.”

Gar: So, what is the answer to that feedback loop problem? Now, we are right at the heart of a good example of system design. And I think, how to balance these interests. How do you create a traditional power that manages some of this? And we’re seeing that at the national level where the political system biases the judicial system. These abstract questions become very practical in a debate as it happened during the constitutional period when people are debating what the constitution should look like. These are the inherent problems that we need to flesh out and work and debate.

Gar: And one other one to add to it, as technology goes forward, we are, practically speaking, could be a society of very little work time at work because the technology could already produce very good incomes if it were distributed properly for the vast majority of the 20-hour week already. But it’s all concentrated at the top in ways that they’re not. But as we go forward in the rest of the century, the technological projections are for the possibility of radically reduced work time, if we can manage it politically, which means that people will be free of their interest group companies. They’d be free as citizens rather than sort of, “Well, I’m an oil work. I want the oil company to work, or I’m a police guy. I want the police to work.” They would be less, less dominated by their work condition.

Gar: Technology is moving in that direction already. And if we can organize ourselves institutionally to manifest and kind of exploit the wonderful possibilities that technology offers rather than distribute it all to the top, you’re going to have a society where there’s a lot of free time to do kind of politics free of institutional pressures or substantially free. So that’s a whole another dimension to add to the debate. We’re right in the middle of the Next System Project debate. These are the kinds of questions that we’re trying to weigh.

Jim: Yeah, and this one, of course, is an absolute key one, right? We’re at the cusp. My other part of my life, I work in artificial intelligence at the highest end where we’re looking to reach human levels and beyond. And it’ll happen whether it’s 40 years or whether it’s 10 years, maybe it’s as long as 60 years. I’d be surprised if it’s any longer than that. And if this is managed correctly, this could be an amazing boon for humanity like it’s never seen before. In fact, a friend of mine calls it automated luxury communism.

Gar: And free time.

Jim: Yep, exactly. That’s what I would think. Hopefully, people, especially if we can deprogram people a little bit from thinking that he who dies with the most toys wins and status through possessions, our Game B movement has a lot of ideas about that, which we’ll talk about in a little while. This may be a huge opportunity, but as you point out that if the current hyper financialized corporate operating system remains unchanged, essentially it will mean the rich will get way richer than what you can possibly imagine, while everybody else is pressed down pretty far and gets no benefit from this or very little.

Gar: Right. But for the first time in history, really, the technologies is moving into the direction permitting freedom from the work demand or much more free time. So that’s a really interesting development.

Jim: Well, it’s interesting, Keynes predicted it that we’d be working 15 hours a day by now, and that didn’t happen.

Gar: But technologically, it’s available technologically. It hasn’t been available politically.

Jim: Yep. And psychologically. We’re programmed to want more. More, more, more, right? Fancier, shinier. We need a whole cultural system in addition to an economic system so that we have a high quality of life without this intense and relentless focus on status through possessions.

Gar: Well, that takes you to the design of community culture. The emphasis in the book that you’ve been talking about, What Then Must We Do, and the emphasis in a lot of work I do, and I’m doing a new book on the subject, is how do you generate the conditions that produce a more community culture that reflects the values that you just articulated? How do you actually think about that in terms of systemic design? And then what’s the path? You can’t plunk that down. What are developmental paths that move in the direction of a design that might encourage broader community vision and community understanding, the reflection of each in each other’s eyes as equal, as philosophers put it, that’s another factor in the systemic design question? How do you do that? You’re at Santa Fe Institute. An old friend of mine, Sam Bowles, has been experimenting and kind of studying that question in micro situations. I don’t know if you’ve seen some of his work on that.

Jim: Oh, yes. I’ve read a lot of his work. In fact, Sam’s going to be on the show next month.

Gar: Oh, good. Well, give him my best.

Jim: I certainly will. Yeah, Sam’s one of my favorite people. Him and his worked with Herb Gintis.

Gar: Yeah. Herb and Sam are old friends of mine. They were part of something called The Cambridge Institute long ago in Cambridge that I was deeply involved in.

Jim: Yeah. I think they have shown reasonably convincingly that the theory that Homo economicus as the natural state of homo sapiens is actually just plain wrong. And that there is a lot of baked in libido for cooperation, and to some degree altruism that with good institutional design, we can build a society that isn’t doggy dog

Gar: Yep. Yep. I agree. They’ve done great work. And Sam’s last book is really interesting on this.

Jim: Yeah. I haven’t read it yet, but I’m going to read it for his podcast.

Gar: Part about the incentives with where folks drop off their kids or pick up their kids at the nursery school in Israel. There’s a wonderful passage there. He really always [inaudible 01:05:50] some of the things you’re talking about.

Jim: Yeah. In fact, it’s funny, one of the areas that we’ve been studying is kibbutzes. In fact, I had a expert on kibbutz on the show last month. In fact, the showed just came out today and it’s really quite interesting.

Gar: Send me the link, I’m interested. I had spent a lot of time studying the kibbutz many, many, many years ago.

Jim: Yeah. This is Ran Abramitzky from Stanford. The book is The Mystery of the Kibbutz, and there’s a full episode up on it right now on my website. So I’ll send you the link. And what he does is essentially compare and contrast classic Western Stanford economics department analysis on what people should do versus what actually happened in the kibbutz. And what he found, which is interesting, is the original kibbutzes were set up on a radical egalitarian basis. Everybody got exactly the same material well-being in their life, whether they were a lawyer or the person that cleaned the toilets.

Jim: And yet economic analysis, Homoeconomicus style, would say, “Oh, you should see adverse selection. The worst workers will want to become members of your kibbutz. You’ll get brain drain. Your best workers will leave. You’ll get shirking, et cetera.” And it’s interesting. He showed that yes, some of those things do exist with the kibbutzes, had developed at least partial solutions for those tendencies.

Jim: Then he gets into, very interestingly, what happened in the kibbutz is after 1977 and when Likud government cut off a lot of the economic support that they’d been providing under the labor government. And at that time, the kibbutzes started differentiating. There are still about 20% that are still hardcore egalitarian. There’s another fraction that might as well be end Ran incorporated. And there’s a lot in the middle, more like Sweden, or even a little bit more welfare status in Sweden. So it’s an extraordinarily interesting found experiment.

Gar: And the middle one’s called the [foreign language 01:07:41].

Jim: Yes, for a brief period of time, I had all that in my mind. I read not only Ran’s book, but Howard [Nir’s 01:07:48] two books on the history of kibbutzes as well. Let’s move on to another topic. We’re getting a little short on time here, which is you talk a fair amount about municipally-owned utilities, municipal smart land development practices, et cetera. Why don’t we talk about that a little bit as a building block of systems architecture?

Gar: Yes, because that’s a really interesting question because the municipal government is a one person, one vote corporation. And when should it be the dominant controlling figure in a public utility, for instance, where we see that’s the most common place you see it. Also, if you want to see the balance between worker ownership and community ownership, it’s the city municipal government versus the worker control piece of it called the police unions or the police group. So at what scale is municipality, and let me go slightly different, and the neighborhood in big cities, because there’s a whole developmental period of neighborhood corporations.

Gar: When in a big city might the neighborhood or the city in a small city, like my original home in Wisconsin, a city of about 80,000, when do you think that’s a useful place to put some industry like the public utility? Should that be a city unit, or should that be private in the small cities or big cities? And in very big cities, how do you break up neighborhoods? And there was a big movement towards neighborhood incorporation in the ’60s and ’70s, and some cities like Atlanta and also Seattle still have strong neighborhood corporations that are kind of subsidiaries of the city government, but partly controlled by the neighborhood.

Gar: So you get into at what level of scale of industry and a scale of community is appropriate to different forms of ownership that, in this case, our community. So they represent the whole community, as opposed to just the workers like the police workers, or even the people who work in the candy industry or the oil industry. So you want to give the oil companies over to the oil workers, then rather than the community, as a whole, either the state or city or national or the region, as in the Tennessee Valley Authority, if you give the oil industry over to the ownership of the workers in the oil industry, or the businesses in the oil industry, their interest is polluting the country because that’s going to be very much to their advantage financially.

Gar: So where do you structure? These are the questions of the Next System Project. Where do you actually would you want to structure the design of different scale industries in a way that benefits everybody and all the parties of interest, particularly the community as a whole? In any community, and this is really a big point for most people don’t think about, the workers involved of working age work, leaving aside the old people, leaving aside the sick people, leaving aside the kids who are in school, leaving all those aside, you’re talking 40 or 50% of the community are “the workers”.

Gar: Well, you can’t have a community without the mothers bringing up kids and running homesteads, et cetera, et cetera. But so worker ownership and dominance in politics, as some people advocate, and work around it, the systems, what do you do about the rest of the people of any specific community at all ages? So that’s another variable in systemic design. I don’t want to make it overly complex because I would resort to the community framework as a beginning point, and then to modify it.

Jim: Let’s move on to another topic. How do we get this done? You quote Antonio Gramsci, if that’s how you pronounce it.

Gar: Gramsci.

Jim: Gramsci, about the problem of cultural, ideological hegemony, which Margaret Thatcher called, “Tina, there is no alternative.” Somehow the idea that’s gotten in people’s head that the current way of doing things is the only way of doing things. How do we get people to open their ears to an alternative?

Gar: Well, I spent half of my time as a historian, so I’m reasonably optimistic about that problem, if you view it historically. To put it in kind of a quip, systems come and go historically. I mean, the world was dominated by tribes and feudalism at one point in kings and churches and the feudal systems and nobles and no votes. Somehow people got to vote. I think, over time, we’re talking about an evolutionary development from the bottom up where people would feel more and more empowered locally. That’s why the local things are so important that in everyday experience, building models through time that alter the way in which the institutions are structured.

Gar: So if you want to play this game, I sometimes tell some of our staff or students when I was a university professor, you have to throw decades on the table. System change is about the transformation of institutions over periods of time. And we don’t have governments much run by kings and feudal Lords anymore. But if you’d asked that question during that period, they’d say you can’t change it because it’s impossible. So a I’m cautious optimist about long-term development of new consciousness and new institutions.

Gar: But I often say to people, “You want to play this game? The price is decades of your life on the table to work on this kind of change.” Like the women’s movement did, like the labor movement did, like the civil rights movement did, like the environmental movement did, all of which had huge long decade by decade periods before they actually start making change. And I think that’s the nature of the game. So I am a cautious optimist as an economist, political economist, and as a historian about transformative possibilities.

Gar: But I do not think you should play the game if you think it can be done overnight. There’s a lot of developmental work to do, and why experiments are really important at certain stages and political movements and institution building. I think it’s a very creative moment in American history, by the way. We’ve been studying all these experiments on the ground that the press doesn’t have the resources to cover. So I think there’s a huge amount out there, which we put on our websites all the time. But it’s a long process and you shouldn’t play this game if you think you can do it overnight, or you should just make a small contribution.

Gar: The name of the game is to look at people like the supreme court justice who just passed, who spent decades of her life working for women’s and feminist’s rights. That’s true in civil rights. We also just lost John Lewis’ decades of work, labor rights decades of work. That’s the name of the game. But from that framework as a historian rather than as a political theorist, I am cautiously optimistic about the as Martin Luther King said that the arc of history moves towards equality. But maybe a long arc or at least it is worth the good fight.

Jim: That’s, I think, a very healthy way to look at it. I’m always very skeptical that people think they can go in the streets and suddenly the world’s going to change. Sorry, it doesn’t usually work that way. And when it does work that way, it’s not usually a change for the better if we look at our history, right?

Gar: Yep. Totally agree. Totally agree. I call the process evolutionary reconstruction, as opposed to revolution or reform. Reform assumes the existing institutions. You kind of clean them up around the edges, but changing the system is an evolutionary process if it’s going to get anywhere.

Jim: In fact, let’s move now to our last topic, as we’re getting close to our 90 minute time. You basically, I love this as a person who likes to think about strategy, and think a little deeply, and aren’t afraid of relatively complex interrelationships, you lay out a four-part path forward. Well, I’ll let you say what else is missing, but essentially you have four parts. Evolutionary reconstruction idea, the checkerboard strategy, very clever. I’d never heard of that before. I’d never even thought that thought, but reading that thought gives me a new tool. Crisis transformations, and then big crisis transformations. Maybe you could take us through those four and how you see those moving us towards this better future.

Gar: Well, evolutionary reconstruction is what we’ve begun to talk about in the experiments with worker-owned companies and community worker companies like in Cleveland and Preston English with community-wide corporations to which are subordinated worker companies. There’s a lot of evolutionary experimentation with new forms. That’s one. Second, as opposed to class struggle, which is conservatives versus liberals, there’s a lot of experimentation in what I call the checkerboard. You can find really interesting examples in Western Texas of quite interesting community cooperatives.

Gar: You can find them in Atlanta. You can find them in Rochester, New York, where there’s a really complex fight going on with the unions. So there’s a whole checkerboard of experimentation. And one of the things to say about this is that the press doesn’t cover a lot of this stuff at the grassroots level. They really don’t have the resources or interest in doing it because most newspapers are financed by advertising to people who can pay the money. And so the stories that are written are not really about what’s going on in poor communities or working class communities or they’re under-covered. But there’s a lot of experimentation on the checkerboard side of this all over the country.

Gar: We cover that on our webpages. We follow it so we know that there’s so much more going on that really, it’s a wonderful period of experimentation. It’s like the 1920s, when what was called the “laboratories of democracy” the states, the states around the country, experiments were going on that during the new deal became the sketches upon which the new deal about a lot of the new deal models. And I think a lot of that’s happening in these different parts of the system. Give me the other two categories on blacking on the last two categories that you mentioned.

Jim: Crisis transformation and big crisis transformation.

Gar: Yeah. There’s a good example of a crisis transformation in two different levels. The Great Depression, which is a very different process from little experiments building up over time, to be bigger experiments here and there around the checkerboard. The crisis transformation was collapse of the system producing, for instance, the social security system and the labor laws. That’s a whole different process that allows a qualitative shift in the systemic design. That’s a crisis transformation. And it was not a total transformation. It was only a partial transformation.

Gar: A much larger transformation might occur if there were sufficient institutional and cultural buildings on the ground that laid the foundations for something that was far beyond one or two sectors. The new deal was, from the point of view of the system, is still a corporate capitalist system, very weak welfare state compared with Sweden, for instance. It’s a dominant, still the dominant corporate system. A big systemic crisis might or might not achieve a revolution, and often that’s not the best way of transforming because it often involves violence and repression and a long time for getting out from under that system. But those are the different models over time.

Gar: And another way to think about it is the transformative period. I often say to the younger people, “You want to play this game, you got to throw a few decades of your life on the table, 10, 20, 30, 40 year time spans.” The way of thinking about transformation is neither a revolution kind of horizontally splitting society and turning it upside down, the workers take over, nor exactly are reform where the corporations control everything, and you try to clean it up around the side. That’s the welfare state or the social democratic model, but an evolutionary reconstruction is kind of like in geology where the rock formation slide over each other up one from the bottom over it transformative.

Gar: So that there’s enough building up from the bottom that begins to transform the larger pattern over time institutionally. And at some point, there’s a culmination of this building process that makes for a qualitative shift as well as a quantitative shift. And I think it’s that set of processes rather than the classic revolution, or a classic oval like liberals or conservatives and things will happen. Those are secondary features of a larger transformative process coming in from the bottom up, in my view.

Jim: Yep. The thing I like about that is it’s realistic. One could imagine doing all four of these things, doing experiments at the local level, building patterns of them around. And one of the things you didn’t quite mention, I don’t think, is that the checkerboard strategy has the interesting advantage, that assuming again, the experiments work, is they provide local examples to people about, yes, it is possible to do things differently. And then when a crisis occurs, people are more willing to try these different things. And then when there’s a big crisis, then there’s even more willingness to try things, but they’re more willing to try things if they’ve been demonstrated at least at a smaller scale than they are based on some goddamn intellectual pinhead’s ideas, if you know what I mean.

Gar: I mean, I think there’s a role for theory that you and I have been talking about this whole conversation. But in general, I totally agree with what you say. And I think that I call it evolutionary reconstruction or checkboard strategy, including those four models. And I think that’s a hopeful line of development that we can pursue and are pursuing. A lot of people are doing that stuff on the ground. I’ve been working on this kind of thing for many, many years, since a Sam posing against us, and we’re involved in the Cambridge Institute back in the ’60s, the models that have emerged around the country and around the world in the last 50 years are extraordinary and developments upon which you can really begin to see the transformative path.

Gar: And a lot of hard work, and don’t play this game unless you want to throw a few decades on the table. But I think the arc of history of Martin Luther King once said as long, but I think it probably bends towards equality over time. Let’s hope, but I’m encouraged by all the experimentation we see, and all the developmental processes we see below the horizon of what most newspapers cover, unfortunately.

Jim: Yeah. That is a damn shame. Hopefully, we get a little publicity here for your efforts. People can check it out on the episode page at There’ll be links to everything we discussed here. And Gar, I really like to thank you. This has been a remarkably interesting conversation. I’d like to thank you for the work you’ve been doing. This is important stuff.

Gar: Oh, thank you, Jim. And it’s a good conversation. I can see you’re into this game. These sets of questions deeply as well, and so it’s good to talk with someone who’s thinking seriously about this.

Production services and audio editing by Jared Janes Consulting, Music by Tom Muller at