Modern Capitalism: Privatization, Employee Ownership, and Industrial Democracy: Privatization, Emplo

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CAPITALISM

Normally, in its worldwide private sector development strategies, USAID requires the use of an unsubsidized, market-related interest rate and a reasonable degree of assurance that the loan pool can be restored by loan repayments and made available for future private sector loans. The ATC ESOP project represents a breakthrough, both in its insistence on the democratization of access to productive credit and in its innovative use of Islamic banking practices for reducing the cost of such credit to workers and for increasing the likelihood of restoring the principal to the loan pool for future ESOP loans.

The profit-sharing arrangement is conceptually compatible with the idea of employee ownership. The employees will be able to acquire ownership and pay back the loan only if the company is profitable. Thus, employee ownership as well as full recovery of the loan will depend on the performance of the employees and of the company. If there are no profits, the employees get nothing, owe nothing, and the shares reserved for them would be sold to the private sector at large. Since the employees have no attachable assets, in the absence of corporate profits it would be a practical impossibility to turn to the employees for repayment of the loan.

And, like the borrower, the lender for a predetermined period is linked directly to the productivity and profits of the company. Already about a dozen government-owned companies are under consideration for these ESOP buyout loans. The Egyptian press has also reacted favorably to the ATC model. Khaled Sherif in the prestigious Al Ahram Economist weekly. Repayments will go back into the Account to provide additional loans to other workers and not to be returned to the U.

The idea is new for us, but will convert the workers into owners and not employees of the new plant-shareholders, not bystanders. The feeling is that the worker, because of the ownership in the project, will be more loyal to the company and its success. In addition, the worker will receive incentives and dividends from the shares he owns.

Some advocates of privatization believe that who owns and enjoys the rights and powers that flow from private property is unimportant. This attitude, in our opinion, ignores the relationship between property and the empowerment of those who own and control modern instruments of production.

And it leads inevitably to concentrated control over production and basic economic decisions, and to the very opposite of effective economic policy for a democratic society. If greater efficiency is the goal of privatization, the question should be raised: Can a society have economic efficiency without economic justice?

Without justice there can be no harmony in the workplace or in the economy. And social and economic justice is impossible without a system of decentralized participation, accountability and economic power.

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Since power and accountability follow control over productive property, and the ownership of productive enterprises is largely determined by who has access to capital credit, the key to genuine democratization of society lies in decentralized access to future productive credit among workers and consumers, as directly and personally as possible. This process will necessarily evolve gradually, as policymakers, corporate executives, labor leaders, and institutional lenders lift their minds above the zero-sum paradigm to a more synergistic framework designed to make every citizen an owner.

Actual full-time operation is expected to begin in June Center for Economic and Social Justice.

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Join Volunteer Donate Subscribe. Expanded Ownership as a New Pillar of Economic Policy Both public and private lending institutions have been prime culprits in fostering state ownership of productive enterprises.

The altering agrarian constitution is explored with using certain long term survey facts and statistical types. This e-book effectively criticizes well known narratives approximately Indian agricultural improvement in addition to simplistic evolutionist, Marxist or neoclassical prognoses.

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