Last month, PBS NewsHour’s Business Desk featured an essay by Chris Mackin with the consulting group Ownership Associates entitled “The Alternative American Dream: Inclusive Capitalism.” Mackin uses the term “inclusive capitalism” as an ownership sharing proposition – one that is about creating a new relationship between employees and their workplace based not on a “sense” of ownership but on actual, tangible ownership.
At its heart, Mackin proposes inclusive capitalism as a practical and actionable means of making assets more accessible to more people. Assets – both physical (housing, resources) and not (copyrights, stocks) – are most often the domain of the wealthy, the one-sided accumulation of which continues to deepen the economic divide in the United States. Therefore, it stands to reason that more evenly distributing and sharing in those assets will begin to address inequality.
Broad-based resource sharing strategies are one way to reallocate assets. The best example of this is Alaska’s Permanent Fund Dividend where every resident of the state of Alaska received an annual dividend as a share of state-wide oil revenues. Annual payments are typically in the range of $1,000-$2,000 per person. Modeled after this program is the proposed Sky Trust, the brain-child of entrepreneur Peter Barnes, which would pay equal dividends to all Americans using revenue from carbon permit sales.
Broad-based ownership of jobs – what Mackin” is distinguishing as “inclusive capitalism”– is another way. And one that is already in wide use throughout the country. Employee Stock Ownership Plans (or ESOPs) are perhaps the most widely used – and accepted – form of employee ownership. Through owning a portion of stock in her or his company an employee receives not just income, but also has the opportunity to build wealth that would otherwise be unavailable in a traditional workplace. Cooperatives are the most democratic and authentic means of instituting inclusive capitalism in the workplace. Both forms of ownership have demonstrated higher levels of worker satisfaction, while making no concession to the efficiency of the business and, in fact, ultimately benefiting the economy and the taxpayers. Inclusive capitalism can also include partnerships with law, accounting, architecture and other professions.
The Center for American Progress originally coined the term “inclusive capitalism” in a report released last April entitled “Growing the Wealth: How Government Encourages Broad-Based Inclusive Capitalism.” Authors David Madland and Karla Walter present inclusive capitalism as a means of addressing the fundamental problems plaguing our economy including weak economic growth, high unemployment, and dramatic wealth disparities – while at the same time improving conditions for workers and companies alike. They are careful to point out that inclusive capitalism is not about redistributing wealth but about creating additional, shared wealth and that inclusive capitalism can encourage competition and profit-seeking behavior in a way that also benefits investors, managers, and workers.
Clearly, what Mackin, Madland and Walter have termed “inclusive capitalism” is by no means a new phenomenon. Different forms of shared ownership – from cooperatives to shared stock options – have been practiced in the United States for most of its history and today are widely implemented in companies across the county. Perhaps, however, the adoption of this new term signals a growing awareness of and increased momentum around the need for a new (or, at the very least, re-structured), more humane, economic system – one that shares assets and promotes democracy, particularly in the workplace.