Failures of the Capitalist Economic System

Today we face fundamental economic problems that flow from capitalism's basic structure of competition for private profits and growth.

Corporate Globalization: Global corporations have concentrated ownership and national states under their domination have deregulated capital flows. As a result, capital has become highly mobile due to corporate restructuring aided by new technologies of transportation and communication. Global corporations can now shift money and production virtually instantaneously to outflank people in one part of the world when they organize to assert their rights. This situation is pitting the people of one country against those of another as their governments compete for corporate investment by offering tax holidays, anti-union measures, and environmental regulation abatements.

Economic Polarization: While the technological revolution in microelectronics and automation is radically increasing productivity, the gains in productivity are accruing almost solely to the wealthy elite. Meanwhile, higher productivity under the control of global corporations is creating structural unemployment as the demand for labor is radically reduced. Instead of the higher pay and increased free time for workers if work and productivity gains were shared equitably, we have a society becoming sharply divided between securely employed technicians and production workers and a growing mass of underemployed, poorly paid, marginalized service workers.

Ecological Destruction: The ecological costs of this technological revolution cannot be separated from the social devastation it is creating. Massive ecological devastation is consuming the "biological capital" on which the economy and human life are based. As long as competition for profits and growth is the regulatory mechanism of our economy, competition will force corporate and state enterprises, as a matter of profitability and survival, to grow or die and to externalize production costs as much as possible onto the environment.

Green Economics: Democratic, Ecological, and Feminist

We call for a new democratic economic system that utilizes ecological means of production and feminist modes of distribution. It must be ecological and sustain people across the generations by having proper regard for the ecological capital of nature that is the foundation of the human economy. It must be feminist and liberate women from the double shift of household work in addition to a paid job by providing economic support for the work of child rearing and household maintenance. We call this new economic system Economic Democracy because its prerequisite is the democratic power to choose ecological and feminist means of livelihood and ways of life.

Rejecting all simplistic dogma as to either private or public ownership of productive wealth, Greens take a pragmatic approach that recognizes the need for diverse forms of enterprise and ownership to deal with diverse circumstances and the centrality of goods and services provided by households, voluntary associations, and ecosystems as well as by private and public enterprises.

Greens support democratic self-management in all five of the economic sectors-private, public, domestic, associative, and ecological-that Green economics values.

The Private Sector: Greens support a maximum of free initiative for individuals, small companies, and cooperatives, enabling all people to earn a decent living in useful, meaningful vocations within a democratically regulated economy that meets human needs and sustains the environment. We support private enterprises that are democratic, especially cooperatives.

The Public Sector: Greens also envision a much stronger sector of public enterprises in certain industries-not centralized, bureaucratic nationalization of industries, but a decentralized, democratic municipalization of certain industries and services. Where a larger-than-municipal scale is required, we call for the confederation of municipalities to share ownership of enterprises regionally and for the formation of grassroots democratic structures to perform planning and coordination functions at the national and international scales.

We thus envision a formal economy based on a mix of enterprise and ownership forms: cooperatives, democratic and decentralized public enterprises, and individual and household small businesses. All three enterprise forms will be large in terms of the numbers of people working in them. In terms of assets, we envision a large public sector, a large cooperative sector, and a smaller sector of small businesses. The enterprise form we advocate varies by industry. Our aim is to support the most appropriate form rather than deciding abstractly that one form fits all circumstances.

We further envision an "informal economy" of three other economic sectors which have been invisible to capitalist and statist economies. The value and centrality of these sectors should recognized and supported.

The Domestic Sector of household provision by (mostly) women of such goods and services as child rearing, cooking, and cleaning should be values and supported by such public policies as a guaranteed adequate income and cultural changes that democratize and share domestic tasks equitably between men and women.

The Associative Sector, sometimes called "non-governmental," "non-profit," or "third sector", is comprised voluntary associations that are formed primarily for solidaristic rather than pecuniary reasons. They provide many goods and services that the Private, Public, and Domestic sectors fail to provide and should be supported by such public polices as a guaranteed adequate income and exemption from corporate income taxes. Greens support democratic associations over top-down institutions controlled by self-perpetuating boards.

The Ecological Sector of environmental resources and services are provided by natural ecosystems. They are the foundation of human economies and essential for the continuance of human life. The Earth and its natural systems are our common inheritance, the product of billions of years of natural evolution, not human labor. As such, they should not be privately owned. They should be respected, cared for, and used in accordance with principles of ecological sustainability and restoration. All concepts of ownership of land and natural resources should be provisional and subject to collective democratic stewardship.

We regard this democratic economic vision as an alternative to both the capitalist and the statist economic systems prevailing in the world today.

The capitalist system is based on a competitive struggle to exploit people and nature for private profits and growth. We reject this system because it creates a dynamic of endless growth that is ecologically suicidal and breeds greed and domination in society.

We also reject the statist bureaucratic command economies, such as those which once dominated Eastern Europe, because they place centralized power in the hands of state elites who have likewise exploited people and nature for military-industrial expansion in competition with the capitalist countries.

Today our economy entails nearly total domination by giant capitalist corporations. This corporate sector has failed to meet the basic needs of millions and has consistently abused the environment. Our vision of Economic Democracy promotes alternative economic structures to capitalist corporations that put human needs before profits, are internally democratic, and are democratically accountable to the communities in which they function.

Goals

Among the goals Greens seek to realize in a democratic economy are:

• to align our economic systems with natural ecosystems in a sustainable way that does not degrade or deplete the Earth;
• to supply an ecologically sustainable level of food, shelter, health services, and education to meet the basic economic needs of each person on the planet;
• to replace alienation from economic processes that are beyond democratic control with participation in collective economic decisions, meaningful and useful work,
• to translate increased labor and resource productivity into materially sufficient incomes and increased free time for all;
• to eliminate exploitation and oppression in economic structures with full payment for labor and workplace democracy;
• to eliminate harassment, unequal opportunity for advancement, hierarchical divisions of labor, and pay differentials based on sex, age, race, ethnicity, sexual orientation, religion, and physical or mental abilities;
• to decentralize and regionalize economic activity through local self-reliance in democratically accountable community-based economies;
• to reverse the accelerating concentration of wealth locally, regionally, nationally, and internationally;
• to develop systems of ethical social and ecological audits and accounting that evaluate all goods and services on a "true-cost" basis, including their labor time, resource extraction, manufacture, processing, marketing, durability, and disposability;
• to incorporate these true costs into the cost-accounting of local, state, and national businesses, governments, and institutions;
• to produce goods that are durable, repairable, reusable, recyclable, energy-efficient, resource-efficient, and non-toxic, using both nontoxic materials and nonpolluting production methods;
• to encourage and reward ecological and socially responsible businesses and financial institutions, promoting democratic forms.
• to provide material support for households and families in such areas as basic income, child care, leaves of absence, and short-time work;
• to restructure our patterns of income distribution with basic income guarantees to support the value and wealth created by those outside the formal monetary economy, including parents, housekeepers, and community volunteers;
• to promote these goals globally in a cooperative manner.

Property Rights

Economic Democracy requires a restructuring and balancing of three types of property rights:

1. The Common Property Rights of Individuals-These rights cover the rights of individuals to not be excluded from the use of designated resources. The individual members of all households should have the right to essential public services, including basic income, education, health care, child care, and the right to earn a living in a useful job for those willing and able to work. All individuals should also have the right to a clean environment: clean air, clean water, food and other products free from toxics. These rights are covered in the Economic Bill of Rights we propose.

Enacting these rights fulfills the feminist economic principles Greens uphold because it supports household production, which is overwhelmingly contributed by women. Studies show if the contributions of household production in industrial countries today - the child care, cooking, cleaning, and so forth - were bought on the market, it would take income that is well over double the average full-time worker's pay. That means that of the total value at the disposal of the average household, paid work outside the home accounts for less than one-third and women's unpaid work inside the household accounts for more than two-thirds. Women (in most households) are working a double shift - one a job in the labor market which is paid and another in the home which is not supported today by society. A Green economy will support the household contribution through a guaranteed adequate income and other social provision of key public resources.

The common property rights of individuals embodied in the Economic Bill of Rights also include the right to enjoy a safe and sustainable environment. When enterprises, be they privately or publicly owned, poison and deplete the environment, they are violating the common property rights of individuals. A Green economy must require enterprises to interact with the environment in a safe and sustainable manner and pay for the repair of any ecological damage they may do.

2. The Individual Property Rights of Individuals--These rights cover the right of individuals to be secure in their personal effects, the personal property they use-their clothing, appliances, homes, vehicles, and so forth.

The individual property rights of individuals also covers their labor rights. Coupled to their common property right to earn a living, their right to a job, should be their individual rights to receive the full value of their labor (non-exploitation), the right to participate in the governance of the enterprise in which they work (workplace democracy), and the right dispose of the value of their labor as they see fit (consumer choice). The right to receive the full proceeds of one's labor and to participate in workplace governance requires replacing capitalist forms with cooperative forms of enterprise. The right to freely dispose of the value of one's labor means market allocation of consumer goods and services that are not provided freely by the public sector, such as health care and education.

The individual property rights of individuals also covers the right to exclude others from the use of their self-earned productive resources-their small businesses and farmsteads. The Greens support individual ownership of small businesses, subject to democratic regulation, as a welcome source of innovation, diversity, and economic independence. Capitalism, with its relentless predatory drive to centralize ownership and increase scale, is taking over, crowding out, and destroying small businesses based on the self-earned property of owner-operators. A Green economy will protect small businesses from predatory capitalism.

These individual property rights are not absolute, but must be balanced with common property rights. Small businesses cannot violate the common property rights of individuals to a clean environment, for example. A portion of individual's income from labor must be taxed to fund common property rights to key public services like health care and education. How these balances are struck should be determined democratically.

3. The Collective Property Rights of Enterprises--Larger scale enterprises are inherently collective enterprises, whether owned by capitalist firms, cooperatives, or governments. Collective property rights give enterprises the right to exclusive use of their means of production, subject to democratic regulation. Large-scale production of certain goods and services can only be done effectively if certain people have the right to use those means of production.

In this area of collective property rights, the Greens seek a thorough going democratization. We look to phase out capitalist corporations where owners exploit the labor of workers. In particular, we want to phase out the absentee-owned, publicly-traded corporation which dominates the economy today. This form of enterprise promotes social irresponsibility through its very structure, which is driven by the need of finance capital for quick returns regardless of the long-term consequences of the enterprise, its workers, its community, and the environment.

In the place of capitalist corporations, we want to promote two alternatives: (1) cooperatives controlled by the workers and/or consumers that use them and (2) decentralized, democratic public enterprises that are really accountable to their public owners, the citizens.

Democratic public enterprise means not only converting some private firms to public ownership, but first of all means democratizing the public enterprises already owned by government: the many housing, transportation, energy, and other "authorities" and corporations. Too often these operate as examples of "lemon socialism" where the government operates a needed enterprise like rail transportation that private enterprise cannot make profits on. In other cases, taxpayers also subsidize public enterprises that in turn subsidize private corporations, for example, where energy authorities provide corporate welfare in the form of cheaper power than the average household or small business pays. While many of these enterprises should be publicly owned and operated at a loss to serve the public interest, public enterprise should not be confined to these money losing areas. Public enterprise should also include money making enterprises that generate revenues for public services.

In place of the authoritarian structures of most corporations today, whether privately or public owned, we call for democratic structures. In the public sector, this means boards elected by enterprise workers and by the public. In the private sector, it means cooperatives where membership shares are not commodities traded in capital markets, but inalienable individual property rights. In contrast to the capitalist firm, where net income is distributed according to ownership share, in a cooperative, net income is distributed according to the contribution (labor in a worker-owned cooperative, purchases in a consumer-owned cooperative, deposits in a credit union, product in a marketing cooperative, and so forth). Also in contrast to the capitalist firm where voting rights are distributed according to the plutocratic principle of capital (one dollar, one vote), in a cooperative voting rights are based the democratic principle of one person, one vote.

Allocation of Economic Resources

Just as Greens reject all simplistic dogma regarding private or public ownership of productive wealth, Greens also reject dogma regarding market or planned allocation of resources. For Greens, it depends on what works best for a given economic resource in terms of meeting human needs and sustaining the environment. It also means what works today as a next step toward a more democratic, ecological, and feminist economy may be inadequate at a later date. How resources are best allocated is something that should always be subject to democratic revision.

As a general rule in terms of immediate steps, at one end of the spectrum, Greens want to move labor, land (nature), and capital out of the market and, at the other end, keep producer and consumer goods and services allocated by markets.

Where markets are used, the Greens support fair markets where income is widely distributed so demand is not distorted by the concentration of money in the hands of the rich and where there are many producers so supply is not distorted by oligopoly.

Where planning is used, the Greens support democratic planning by bodies accountable to the affected people, not top-down planning by autocrats. With the top 500 corporations controlling nearly 90% of productive assets in the US, it is not a question of whether we have economic planning in our society, but of who does the planning.

Labor: Greens regard wage labor to be as deserving of abolition as slavery and serfdom. To subject the ability of individuals to get a job to the whims of the labor market is to fail to secure their common property right to earn a living. To subject their right to earn a living to a wage labor relation where owners appropriate a major portion of the fruits of one's labor is to legalize theft.

Greens support the decommodification of labor by phasing out labor markets and replacing them with free association to allocate labor and income from labor. Free association would include worker cooperatives, public enterprises, small business self-employment, and nonprofit organizations.

In worker cooperatives, people collectively employ themselves by mutual agreement. They have a right to a share of the net income in proportion to their labor contribution and a right to participate in governing the work community of the enterprise on the basis of one person, one vote.

While each worker cooperative is not obligated to employ every person who applies for membership, every worker should have the right to work for a living in the private sector (cooperatives, nonprofit organizations, or self-employment) or public sector. That right should be secured by government employment in public works and community services if jobs are not available in the private sector. At the same time, public enterprises and agencies should not be obligated to pay for non-performance on the job. Free association also means freedom to disassociate for good cause.

Another aspect of the allocation of labor and income from labor is pay scales. Income distribution is all out of proportion to productive contribution in the US. The average Fortune 500 CEO made 475 times more than the average worker, compared to 42 times as much in 1980. As an immediate step, the Greens advocate a maximum pay differential of 10 to 1. In the long run, the Greens support moving to an egalitarian pay system of labor certificates based on hours of labor contributed. Each worker would receive back from society exactly the share of labor they contributed to total social production. These certificates would be non-transferable and would expire when used to purchase goods and services. Like money, they would serve as a unit of account and means of payment. But unlike money they would not serve as a transferable store of value that could accumulate in a few hands as concentrated wealth and power.

As a transitional step toward an egalitarian pay system that credits people with hours worked instead of money, government should begin recording and publishing the current and dated labor time required to produce different goods and services. Labor time accounting will establish the average labor time required of each product. These labor values will serve as shadow prices against which to judge the fairness of pay scales and goods and services on the market.

Further steps could be distributing Basic Income Grants in a Universal Social Security system as labor vouchers and paying people working in public employment with labor vouchers. Retailers receiving payment in labor vouchers would receive money for them, similar to the redemption of food stamps today.

Land: The classic justification of private property is that people should be entitled to enjoy the fruits of their own labor. Land, natural resources, and the ecological systems of the Earth are the product of billions of years of evolution, not human labor. As such they should not be privately owned, but their use should be democratically planned. Democratic planning does not preclude the security of tenure on the land we associate with private land ownership and the right to own improvements on the land, nor does it preclude the extraction of natural resources by private enterprises. Democratic planning of the use of nature can be effected by a variety of means: ecological taxes that price resource extraction at its true costs to protect those resources; land value taxation that returns unearned income from ground rent back to society; zoning and other land use planning guidelines; and laws that phase out and ban toxic chemicals in production.

Capital: Greens support the abolition of markets in transferable corporate property rights and their replacement by democratic means of controlling capital. In private sector cooperatives and self-employed small business people, this means non-salable personal membership rights to participate in the democratic self-government of the work community and to receive net income from their enterprise in proportion to their labor contribution. In private sector credit unions, worker-controlled pension funds, and policy-holder insurance cooperatives, as well as public sector budgets, community banks, and investment boards, this means non-salable membership or citizenship rights to participate, or elect representatives to participate, in decisions regarding the allocation of investments.

In theory, capitalists risk losing their wealth they invest in productive enterprises and they should be rewarded for their risks with profits. In practice, most of this risk is socialized.

Hundreds of billions of dollars a year in corporate welfare in the form of tax abatements, infrastructure investments, loan guarantees, preferential contracts, and direct grants means the public assumes much of the risk.

When corporations down size, close plants, and move production, it is the communities left behind who pay the consequences.

When Big Business goes bankrupt, society cannot afford to let them fail and government bails them out: Lockheed, Penn Central, Chrysler, the savings and loan industry, the big banks' investments in Latin America, Asia, and Russia, among many other major bailouts in the last 30 years.

When corporate managements are driven by absentee-owned finance capital to make decisions to promote short-term financial returns at the expense of the long-term viability of the enterprise, as well as externalized social and ecological costs, it is workers, communities, and the environment that absorb the long-term costs.

Even most of the private money invested does not orignate from capitalists' but comes from the workers, either from their savings or from profits appropriated from workers' labor. Workers' savings in bank deposits and insurance and pension funds is the major source of investment funds in the US economy.

We also need to be clear that most so-called capital markets are giant gambling casinos where investors bet on the future value of financial securities and rearrange and concentrate ownership of productive assets. They are not efficient or rational means of raising and allocating fresh capital. Between 1989 and 1996, US corporations retired $700 billion more in stock than they issued.

In short, we have a system of capital markets where the risks and losses are socialized, but the profits remain private and ownership is being progressively concentrated.

Since most investment funds come from the labor and savings of ordinary people in the first place, either from profits or savings in banks and insurance and pension funds, it is only fair that ordinary people should share both the risks and enjoy the benefits that productive investments produce through democratic social control of investment.

Insurance is a means of socializing risk. A democratic investment process should be seen as a type of social insurance system that socializes both the risks and rewards of social investments.

A democratic investment system should be democratically coordinated and decentralized as well. It should incorporate national planning of basic economic objectives and also have a multiplicity of sources of democratically-controlled investment from which enterprises can seek financing. These sources would include publicly-owned community banks, a democratically restructured Federal Reserve System, credit unions, worker-controlled of pension funds, and policyholder-controlled insurance cooperatives.

Enterprises themselves should remain free to reinvest their earnings where they see money making opportunities. But socially planned investments need to cover two additional areas that are neglected under the current system of capital markets: marginally profitable but socially useful enterprises (e.g., rail transportation) and the free provision of public goods and services, such as education, health care, and infrastructure.

Producer and Consumer Goods: When most of us think of markets, we think of the goods and services we purchase. In the democratic economic system that Greens envision, these markets would continue with reforms to make them fairer: more equal income distribution, more anti-trust enforcement, more prosecution of corporate fraud and negligence, more consumer organization and education.

In the longer run, when a more egalitarian system of labor time prices replaces money prices, consumer choice will remain but the market as a system of commodity exchanges will be replace by a system of equal labor exchanges. As the economy becomes more productive in terms of both labor and natural resources, and as scarcity in relation to rational needs is reduced, progressively more and more goods and services should be distributed free instead of rationed by money or labor voucher demand. As the work week is reduced with increased labor and resource productivity, people will have the freedom to engage in informal household and community production and distribution, those areas of life which the market has been colonizing for the past few centuries. People will be free and secure enough to take the time to craft artful goods and services for their own sake, for creative expression, for pleasure, and for social solidarity. Ultimately we envision a fully free economy where voluntary production and free consumption are a natural and normal aspect of living in self-governing ecological communities and bioregions.

Workplace Democracy and the Division of Labor

Economic democracy means democracy in the workplace as well as democratic decisions about general economic policies. Real democracy in the workplace means not only the right of every worker to vote in workers assemblies on enterprise policy decisions and the election of committees and boards, but also the right to take on comparably fulfilling responsibilities in their jobs. Occupational hierarchies based on specialized skills and conceptual tasks as opposed to routine tasks should be replaced with diverse job responsibilities that enable everyone to take on an equal mix of routine and creative tasks. Because different workplaces have different opportunities for routine and creative work, rotation between workplaces in a community as well as among tasks within a given workplace should be organized to so every worker has equal job complexes.

Developing equal job responsibilities does not mean everyone will spend time doing brain surgery. No one should be put in the position of doing a task they cannot handle competently for whatever reason. It does mean that everyone will have the opportunity to develop and contribute specialized skills and everyone will have the obligation to do their fair share of the routine work.

Direct Action for Economic Democracy

Greens support direct action now in experiments to begin creating alternatives even before the public policies we advocate have majority support and can be implemented. We support direct action to create the decentralized, democratic, cooperative, ecological, and feminist economic alternatives.

Direct action for Economic Democracy that we support includes but is not limited to:

• boycotting socially and ecologically destructive businesses;
• organizing labor unions;
• supporting rank-and-file movements for democracy in existing unions,
• organizing international labor networks for coordinated struggle against the international power of capital;
• organizing consumer unions to act on behalf of consumers in dealing with large industries such as electric, gas, telephone, and cable utilities, banks and savings and loans, and broadcast media;
• organizing consumer and worker cooperatives;
• forming community land trusts to broaden access to land and reduce land speculation;
• encouraging ecologically sound personal life-styles;
• organizing cooperative banks and credit unions;
• organizing community-controlled economic development corporations;
• organizing local currencies and barter systems to increase the local circulation of value;
• supporting investment instruments that use social and ecological as well as financial criteria;
• supporting efforts to gain worker control over pension funds;
• encouraging war tax resistance.

Greens see these experiments and alternatives as part of the struggle to win new public economic policies that transform the economy. We do not see these alternatives as a substitute for changing public policy.

Labor and consumer unions, important as they are, tend to be more defensive than transformative.

We know that food co-ops, credit unions, community land trust, and loan funds are not by themselves going to displace giant agribusiness marketers, supermarket chains, the big banks, and the predatory real estate industry. We recognize the limits of alternative enterprises within a capitalist economy. Enormous effort and energy has gone into the wave of co-ops and community economic development initiatives coming out of the 1960s. But they have had very little impact on any significant economic scale. For example, by 1995, Community Development Loan Funds accounted for only $108 million in loans and $208 million in assets nationwide, compared to total value for land, buildings, and other tangible assets in the US of nearly $20 trillion. Over the previous ten years, the jobs they created accounted for only two days of normal job growth in the US economy. Their housing production accounted for only ten days of normal housing production.

But these small numbers do not tell the whole story. These experiments teach their participants lessons in organizing and democracy. They create living examples of economic democracy which demonstrate that democratic economic alternatives work. In these ways, they help build the movement to transform public policies in ways far beyond their economic scale.

Sustainable Economy

Economic and environmental policy should be integrated to promote a transition to an ecologically sustainable economy that is based on the sustainable input of renewable energy and resources and on the discharge of biodegradable, nontoxic wastes that can be reabsorbed by natural ecosystems on a sustainable basis. The first steps toward an ecologically sustainable economy require reforms in economic accounting, taxes, resource extraction, and technology development.

• Ecological Accounting: Incorporate into national economic accounting, statistics, and indicators the valuation of natural capital as well as financial, physical, and human capital.
• Depletion Quotas: On the basis of natural resource accounting in the national economic accounts, set quotas to limit resource extraction, aiming to use non-renewable resources as a bridge to make the transition to the sustainable use of a renewable resource base.
• Ecological Taxes: Phase in ecological taxes on pollution, resource extraction, harmful products, and the use of our common wealth of natural capital (land sites according to land value; timber and grazing lands; ocean and freshwater resources, oil and minerals, electromagnetic spectrum, satellite orbital zones). Ecological taxes will price socially and ecologically damaging production practices and products at their true social and ecological costs. These taxes would steer the economy away from damaging production practices and products and encourage ecologically benign substitute technologies and products to enter the market. Products that might have Eco-Taxes added on to their price include gasoline, pesticides, household and lawn chemicals, air conditioners, jet travel, and disposable products. Eco-Taxes would be revenue neutral, with the revenues received dedicated to subsidizing the development of ecological production and products.

Democratic Economic Planning

• A Public Planning Administration--Create a Public Planning Administration in the executive branch to provide cost and investment subsidies to enterprises that promote key policy objectives, including high-wage employment, worker and community ownership, conversion to ecological technologies, and urban reconstruction. The U.S. Census Bureau would expand its annual Current Population Survey to provide an annual needs inventory to help the Public Planning Administration gear production subsidies to popular needs.
• Price Stability Incentives--Full employment at decent wages for all will enhance productivity and will lead to fuller utilization of the economy's productive capacity. Higher productivity and capacity utilization will generate lower unit-costs and larger supplies and hence downward pressure on prices. However, at the same time, higher levels of demand for labor and for products will generate upward pressure on prices. To maintain price stability, we call for a permanent program of government price stabilization. Unlike traditional direct price controls, we call for a flexible program utilizing tax disincentives assessed on price increases above a target level of price stability. A federal Office of Price Information would collect quarterly data on the unit prices of each corporation's products. If a corporation's unit prices increased more than 2% per year, it would be assessed a price-stability excise tax of 50% of the increase above the 2% target. Revenues from this tax would go to a price-stability investment fund in the Public Planning Administration, which would allocate cost and investment subsidies to industries squeezed by cost increases outside their industries. The Office of Price Information would also review the unit costs in each industry every four years (on a rotating basis) and make adjustments in unit prices as warranted to adjust for the differential costs of inputs and gains in productivity among different industries. Rather than the government directly planning prices, firms set their own prices within the framework of tax disincentives against excessive price increases. Price stability incentives are a more effective and humane way to keep inflation at bay than either the recessions and unemployment deliberately engineered by the Federal Reserve's high interest rates or the bureaucracy and bottlenecks that develop with direct central government administration of prices.

Corporate Democracy

Corporations are not sufficiently accountable to either their shareholders or their other stakeholders: workers, customers, suppliers, and communities in which they operate. We call for a comprehensive Corporate Democracy Act, which would include the following provisions:

• Boards of Directors Elected by All Stakeholder Groups: Different stakeholder groups would elect representatives to the board, including shareholders, workers, and representatives of the appropriate level of government (municipal or county for local corporations, state for corporations operating statewide, federal for interstate corporations).
• Eliminate Corporate Personhood: Legislation or constitutional amendment to end the legal fiction of corporate personhood.
• End Corporate Limited Liability: Make corporate shareholders to bear the same liabilities as other property owners.
• Increased Civil and Criminal Liability for Corporate Managers: End the ability of white collar criminals to hide behind the limited liability of corporations. Change the legal fiction of the corporation as person to create appropriate liability for white collar corporate criminals.
• Federal Chartering of Interstate Corporations: Interstate corporations should be chartered federally instead of by states which bid against each other to create the most lax laws to attract investment. Corporations chartered by the government have a responsibility to live up to the conditions of their charters. Government should be willing to pull the charters of corporations that repeatedly violate labor, environmental, tax, or other laws.
• Periodic Review of Corporate Charters: A public corporate charter review process for each corporation above $20 million in assets every 20 years to see if it is serving the public interest according to social and ecological as well as financial criteria.
• Strengthen Antitrust Enforcement: Require breakup of any firm with more than 10% market share unless it makes a compelling case every five years in a public regulatory proceeding that it serves the public interest to keep the firm intact.
• Consumer Unions--Require that all corporations that are legal monopolies (electric, gas, telephone, cable) or subsidized or subsidizable corporations (including banks and savings and loans) to include periodic inserts in bills that enable consumers to join consumer action groups to act as a watchdog and advocate and negotiate on behalf of consumers. A similar consumer action group should be established for public airwaves through a dues check-off system in income tax forms.

Democratic Ownership

Ownership of certain large and key industries and resources must be democratized as a necessary prerequisite for effective democratic planning and investment decisions.

• Full Compensation to Owners of Democratized Enterprises: Federally-financed programs to convert publicly-traded, for-profit corporations, banks, and insurance companies into cooperatives or public enterprises owned at the municipal and regional should fully compensate present owners through 15-20 year bonds in the same corporations, banks, and insurance companies. Redistributive policies should be effected preferably through progressive taxes rather than expropriations. By giving previous owners a stake in the financial success of the corporations, banks, and insurance companies converted to democratic ownership, the threat of capital strikes and capital flight will be reduced.
• Cooperative Development Fund and Regional Center: Create a capital fund (similar to the federal home mortgage and farm loan programs) and endow an associated regional research and technical assistance centers to enable workers and communities to start up or buy out and convert privately-owned corporations to worker cooperatives or public enterprises and, for retail industries like apartment buildings, supermarkets, and department stores, to consumer cooperatives.
• Democratic Conversion of Big Business: Mandatory break-up and conversion to democratic worker, consumer, and/or public ownership on a human scale of the largest 500 US industrial and commercial corporations that account for about 10% of employees, 50% of profits, 70% of sales, and 90% of manufacturing assets.
• Democratic Conversion of Small and Medium Business: Financial and technical incentives and assistance for voluntary conversion of the 22.5 million small and medium non-farm businesses in the US to worker or consumer cooperatives or democratic public enterprises. Mandate that workers and the community have the first option to buy on preferential terms in cases of plant closures, the sale or merger of significant assets, or the revocation of corporate charters.
• Democratic Banking and Insurance: Mandatory conversion of the 200 largest banks with 80% of all bank assets into democratic publicly-owned community banks. Financial and technical incentives and assistance for voluntary conversion of other privately-owned banks into publicly-owned community banks or consumer-owned credit unions and insurance companies into public enterprises or policyholder-controlled cooperatives.
• Natural Resources: Land, mineral resources, forests, the electromagnetic spectrum (used for communication), and other natural resources are the product of nature's evolution, not of any one individual. As such, natural resources should be held in common for the common good. Ensure security of tenure for homeowners and farmers using land within a framework of democratic regulations and land value taxes that return unearned ground rent to society.
• Energy Industry: We call for a public ownership of the energy industry, from the oil companies to the electric utilities. The industry should be reorganized under a decentralized system of elected local, regional, and national energy boards so that people have the power to decide that we should move from nuclear and fossil fuels to the efficient use of solar-based renewable energy sources, emphasizing home-based systems.
• Transportation Industry: The auto and rail corporations should be brought under democratic control through the public energy institutions (transportation accounts for 25% of energy consumption). With democratic, public control, people will have the power to choose to rebuild the railroads and inner-city light rails and to convert the motor vehicle transport system from internal combustion to such nonpolluting means as electric propulsion through solar-hydrogen fuel cells.

Democratic Money and Credit

• Restore Separation between Commercial and Investment Banking: Repeal the Financial Services Modernization Act which eliminated the Glass-Steagal barrier between commercial and investment banking and generally facilitates the concentration of finance capital in the hands of a small elite.
• 100% Reserve Requirement: Place a 100% reserve requirement on demand deposits in order to return control of monetary policy from private bankers to elected government.
• Low Interest Rates: A policy of low interest rates will benefit everyone except bankers, which is why the Federal Reserve must taken out of the hands of private banks and placed under the democratic public control. Lower interest will stimulate consumer spending and business investment and ease the onerous debt burdens of American farmers and poor countries overseas.
• Democratize the Federal Reserve System: Selection of Federal Reserve officers by our elected representatives, not private bankers.
• National Reinvestment Fund: Strengthen the regional development mission of the regional Federal Reserve Banks. Establish a National Reinvestment Fund administered by the regional Federal Reserve Banks and coordinated by the Federal Reserve Board of Governors under policy direction from Congress. The National Reinvestment Fund would expand community reinvestment standards to the entire financial industry and make strategic investments and loan guarantees that promote key policy objectives, including high-wage employment, worker and community ownership, conversion to ecological technologies, and urban reconstruction. Strengthen and democratize the regional development mission of the regional Federal Reserve Banks by electing their boards during presidential elections as follows: three directly elected by the people in regional district elections, three elected by community development financial institutions in the region, three elected by member financial firms in the region, and two appointed by the Federal Reserve Board of Governors, with the regional Federal Reserve Bank presidents elected by Congress.
• Worker Control of Worker Assets--Pension Funds and ESOP Shares: Pension funds representing over $5 trillion in deferred wages account for nearly one-third of financial assets in the US. Pension fund assets are greater than all commercial bank assets combined. As the deferred income of workers, pension funds should not be controlled by financial elites who often invest these funds in companies and projects that are anti-worker. 11 million workers participate in employee stock-option plans (ESOPs) but in most cases financial managers control their shares. Reform ERISA, labor laws, and ESOP tax provisions to enable workers to democratically control their assets. Amend ERISA to require that pension funds' worker-owners democratically elect pension-fund boards.

Progressive Fiscal Policies

The politicians' balanced budget rhetoric during the 1990s was a cover for cutting public services. To balance federal operating budgets without promoting further economic stagnation and cuts in public services, we call for:

• progressive tax reform to eliminate corporate welfare and raise taxes on the concentrated wealth and unearned income of the wealthiest 5%;
• deep cuts in military spending, with the "peace dividend" reinvested in conversion to a peace economy based on ecological technologies, in rebuilding the nation's cities and infrastructure, and in funding a first-class system of public services and social programs;
• enactment of a program of full employment providing living wage jobs for all because every 1% drop in unemployment reduces the federal deficit by $50 billion by reducing safety net expenditures and raising income tax revenues;
• repeal of the so-called balanced budget deals adopted by Congress that lock the government into budgets years ahead of the conditions in which they operate;
• the separation in federal government accounting of operating and capital budgets so that budget policy is made on the basis of the real operating surplus or deficit;
• accounting for federal spending on education and health as investments in human capital in the federal capital budget;
• federal operating budgets that are balanced over the course of business cycles, with stimulatory deficits during recessions and surpluses during expansions.

Fair Trade

Trade should not be conducted for the profit of global corporations but for the mutual benefit of all the peoples of the world. The Greens support creating a fair trade system where world trade is based on the exchange of equal hours of labor. Rather than administered prices set and controlled by international cartels of global corporations, fair prices should be paid for the labor, raw materials, and finished products of all countries. The US should pull out of the North American Free Trade Agreement and the World Trade Organization, which are leveling down labor and environmental standards to the lowest level. These trade agreements are increasing the international mobility of capital, causing the loss of many US jobs, the disruption of communities, preempting local, state, and even federal measures to protect labor and the environment at home, and abusing labor and the environment abroad. To begin to restrict the mobility of capital we propose the use of measures such as taxes, tariffs, and public enterprise, foreign aid policies that encourage indigenous public ownership and discourage foreign repatriation of profits, the cancellation of Third World and East European debts, and one year advance notice of company closings, with at least one year salary compensation as severance pay. We support the efforts of labor unions to organize internationally to counteract capital's mobility.

• Social Tariffs: The Greens oppose chauvinistic protectionism as well as unregulated, corporate-managed, "free" trade. Instead, we call for an internationalist social tariff system that establishes tariffs that equalize trade by accounting for the differences among countries in labor productivity. World trade should be based on the exchange of equal hours of labor. A social tariff system will use the labor values as well as difference in wages, social benefits, environmental regulations, and democratic production conditions to establish appropriate tariffs for different countries. Money from the tariffs will go to an international fund for financing sustainable development and democratic production conditions in countries with lower wages, social benefits, environmental protections, and worker and community control of production. The social tariff system would level up rather than down the wages, benefits, regulations, and production conditions among countries. With a social tariff system in place, corporations would find no competitive advantages in moving production to countries with lower wages, taxes, and regulations.
• International Capital Flow Controls: Corporate wealth holders will resist democratic economic reforms by moving, or threatening to move, capital overseas. The US should pursue the creation of a system of internationally negotiated controls on capital flows that require countries to return illegal capital exports. Such a system will enable vigorous international trade without massive capital flows. Requiring that new investments be financed with locally raised capital will restore the capacity of national monetary authorities to use interest-rate policies for economic stability, a capacity being eroded today by massive international capital flows. To assist poor countries in need of capital, the system governing international capital flows should combine reduced mobility for private capital with progressive forms of international taxation (such as social tariffs to equalize international trade and a tax on currency speculation) to fund real capital transfers from the rich to the poor countries.