good evening and welcome very very much to conversations where i'm truly very pleased to welcome to the program two gentlemen that have a very very good and long term interest an understanding of the evolution of the american economy with particular offense to some labor policy developments that are crucial to after you have been called with great appropriateness the dean of the riders or the sort of the people who observing the of development of the american scene the labor from the labor perspective and you just attended the f l c i s i was down in florida at the convention senses do sense yourself after your long career a shift in thinking among the people that represent the labor leadership and do you sense a shift in thinking among those who are generally responsible for the evolution of the american economy as a relief to labor policy i want to give you a broad general i'd wish i detected as much of a change in thinking as there ought to be there is no question that the whole onder planning for labor management relations and indeed  work the nature of the workers who make up our labor force and the problems of industrial survival for the country are very peyton only radically different from what they were in the period  movement to reassess its reason for being it was his star actually predicated on the concept of moral and labor likes to translate that in a broad way that it was not just more money but more of social benefit and so on but essentially as jimmy hoffa used to put it rather crudely bringing back the highest buck what it was all about now and get more and more find themselves negotiating for less so there's a whole new ballgame and many of the basic industries the heartland of organized labor are threatened with extinction and i don't want to develop this could take a whole hour of it to move to develop but there ought to be a kind of rethinking and i don't want to pretend that they used the present leadership is obtuse or insensitive to the problems but there is a great reluctance and inertia that keeps some from consumers will get the money to buy and now that that blindness takes many forms in the case of management it sees nothing strange about encouraging technological change which eliminates jobs it says one of its main purposes and encouraging conventional finance which builds the ownership of capital into the stationary base that's been owning a pro one hundred years and now those aren't the people who do the consuming how do the consumers get their money well fifty two percent of federal taxes and sixty percent of state taxes on the average income taxes are collected from the people who earn to give to the people who need nothing in our economic history ever suggest that that is a proper thing to do and as i read the constitution i think it's improper to do it and yeah you can't have mass production without mass consumption yes of like just interrupt and perhaps this hair was what you were about to management using the tools that i've developed can build ownership into the employees to its advantage independently of of how it may react to the hobby employees may react but in the meanwhile it's putting earning power in potential customers from labor has the right to ask for the same thing the use of the employee stock ownership plan or  corporation norman simon inc by another one billion dollars corporation as mark any labor union in that company could have stepped up to management and said we want to investigate whether the employees of this company members of our union and others could buy this before you sell it to a stranger and further concentrate its ownership and we're talking about a one billion dollar me lou is one of the constructive developments that came out of the recent recession still very much of a recession but we don't getting to recover from it but the crunch that was put on many corporations and on many trade unions to survive awakened them to the notion that the old adversarial thing really had had its day and that they had to cooperate and so you have a very well  developed redefinition in many leading corporations general motors and ford the steel companies and so on what is known as the quality of work life movement which i translate as a kind of participatory democracy that would find its finest expression and fullest expression in employee stock ownership profit sharing and a full sharing and of the benefits of a basically a whopper doob approach to survival but it versus them you sit down at the table the management to do wants to give as little as bit can get away with short of a strike and the union of course wants to get for its people as much as it can and so that line gets blurred where you're trivial but the great bulk of that is in the top one percent but how without exaggerating the degree to which there is an open mindedness developing on both sides of the equation because it's  type but most of the conversation there and himself was guilty of a good deal of it was basically adding businesses on the same time lane spends are a large part of his time conferring with the heads of the biggest of big corporations on the development six of an industrial policy for the revitalization of american industry and you just have you know dialogue busy of the implications of it so that you and you have both raised in your in your work and it's a lack of discussion on the importance of ownership and to a degree that is due to something that has happened almost without comment we have substantially destroyed the characteristic of private property in capital equity capital the typical stockholder today  home boards of directors lacking a rational way to finance grow which would be commercially insured credit take three fourths of what's left over that seventy eight's is gone bye bye print take that for all the inertia that exists on both sides we will be moving towards more really giving workers a piece of the action through aesop's through profit sharing is the degree to which  participatory involvement and democratic rule is getting into this paramilitary structure of the factory or the office where you know everything comes has traditionally come top  y capitalizing on their ideas getting them treating them as adults with minds with with useful ideas instead of just troublesome characters who give us a lot of thrown in europe or is every now and then because cracker here or there is somebody at the very top level you know who take the problems in u s steel where they finally got the union after three tries to get to persuade its members to go along on concessions that were badly needed and the st thing the u s steel management does immediately after is to start talking about a deal to bring in a regular studio and all the guys at the plan more where there are two ways to earn income either as a an owner of labor power collect the wages of labor or an owner of capital collecting the wages of capital called labor workers and capital workers if you move if you would  where there are two ways to participate in production and technology is shifting from labor intensive to capital intensive then certainly a proper union goal is to redefine more in terms of the combined wages of labor and capital on the part of the workforce now that means building capital ownership in the workforce and the tools are available to do it and congress has been well lavish in its support and advantages that come from an what's needed is the leadership and i think the natural place for that leadership to come is for  someone to get up and say more now means more in the sense of there being two ways to earn income and what we the the reasonable were rightly very upset about this and regarded it as a grave threat instead of saying well let's go one step further instead of the management going into bankruptcy court why should we sit down with them and say look let's entitled to a piece of this corporation and then then they and of course it can't be the kind of thing that was talked about earlier of the absorption of norton simon by as mark or  expire where the workers suddenly wake up one more after being told you're all partners we're in this together and we all have to make sacrifices together and so on the next day they suddenly find that the company they work for is no longer in existence and they're working for somebody  flam and expect workers to be really cooperative but they were very concerned about the bankruptcy direction and that a lot of money problems within the economy in a number of companies that could very very were also bodies of financing is what one wonders again on the face of it why wasn't that trillion dollars stashed away in the assets of employee pension funds in private industry and in public employment as well good deal of it collectively bargained but again the application of that is discourse on is really doesn't make any sense from the standpoint of the stability of the industries involved and on the contrary tens over the incidentally is the labor world involved in that it's their money that is put into funds that are turned over anywhere from fifty to one hundred percent per year they have since their nd hand securities does not newly issued securities the workers through that is connected with the yield on nd hand securities sixty seven percent at best and normally that's below the rate of corporations runs from twenty five to sixty five percent a year so that aesop connects the employees with that big source of income and advantages the company as it does the employees bo had makes it possible by the way to have lifetime employment in the truest sense it makes the japanese definition of lifetime employment look artificial which it is because a worker can enter the corporate world the business world and the production world as a labor worker begin to pick up in common earnings as a capital worker because corporations should be financed in ways to take in the natural say the wages of my capital are adequate i've got lots of things on my mind to do i've been wanting to do all my life i'm going to earn my income as wages on my capital i'm going all gone be productive till my dying day i'll have an estate to hand important than ever to get accepted and recognized this concept that you can get you our income as wages in the traditional sense wages by labor more as wages pre capital and that the labor the labor by be very interested in your reaction it seemed to me that something extraordinary has come out of the reagan administration's push for deregulation and it shows up everywhere but it's showing up most clearly of course in the in the airlines and in trucking and in time and in railroads and it will show up more it becomes clear and i don't know that the regulators themselves really see this yet it more was gompers term for the men in the shop believe me management at all times there was more to the th power or something like that what regulation did is hold the consumers still so that he could be exploited by this process now what happens when the consumer breaks loose when he goes for the lowest price guy and so a teeny weeny little airline can come in and knock over a big wood because they sell for less room now what this really says is we should have been thinking about what was going on and realize that ultimately we all work for the consumer adam smith said the purpose of production is consumption has no other function whatsoever so that anytime we leave the consumer out of the formula we should remember that boom by by changing the way in which people participate in production from labor intensive to capital intensive you of boy  exploitation of the consumer the regulation has made possible that brings us to a pretty kind of fix as a world is one that we really can friends a number of examples that have been able to be put together out of our historical experience want to talk some about the examples of some of and welcome mr ruskin in kelso telephone company finance and we were talking in the earlier section of the show about the fact that we've had problems with people the bankruptcy problem of some of the people in the labor movement a concern within the general problems of the economy is we move into a highly industrialized and technologically oriented purposes tim and that there could be a great deal more ownership on the part of the workers and the general citizenry and that that's something that we collectively bargain to bowl and we have had some increasing numbers of people who have despite the difficulties and the general lack of dialogue in the public dialogue about this issue there with a number of companies that have managed to become aesop and there have been benefits that have been occurring to them if you can spell out and we could see there are some having the l the potential is virtually unlimited for a number of reasons as things stand today we we accept as normal the public ownership of gigantic capital instruments things like subway some office buildings universe water systems even power  systems the fact of the matter is that one of the way to restart the earning power and enhance the earning power of the american people is to privatized those facilities and have them taken over by private facilit corporations with the use of the facilities leased to the normal using body i mean you have a university you lease it to the university and the in effect the wages  of the employees of the facility corporation are simply passed through to the university in the form of payments made for faculty payments made from facilities and some of the course that is to build the ownership of what is now public capital in two individuals take the cost off the off government that's an enormous cost of government one of the heaviest costs of government are public pensions systems and when you build the ownership of let's say the new york subway system and then the public buildings into the employees of the city of new york all of school employees subway employees administrative and what have you with the city committed to  rental which will give the stockholders a reasonable return you've got the best guarantee on earth moon in terms of income and you don't you have no money waste on nd insecurities and all oh well i think you say you and the city of new york a one billion dollars every quarter yeah  going a whole lot better service and get some of the capital needed for those services in the dark and you would have a concern about the care the facilities and the people who are using you know this is one of the things that lou was talking about earlier  interest i think in this connection and that is the degree to which collective bargaining in many interests industries and particularly in the regulated industries tory knows dealing directly with consumers became a collusi process in which the union was understandably interested in getting the most for its people management was perfectly as long as it had it continues the union often has a stabilizing element in preventing competition as long as it could determine what the price was didn't care the consumer was always left holding the bag on what often was almost an extortion settlement and this is part of the th that has now created the problem not only in the airlines and in the other trucking and railroads but even in steel and elsewhere where corporations are now being formed that are able to undercut construction industry of big abuser of that collusive relationship bonding the same nonunion penetration if you got into a nice up relationship that the whole focus would shift in ways that would be very beneficial not only to the workers involved but to the stability of the corporation but even more important to us as citizens to the consumer yeah you can begin to take the lives of you so often imply it into other aspects of is holding let's say the consumers of pacific gas and electric company in california room holding them still while conventional finance bills the incidental the fact of the matter is that none of it gets into the consumer the utility consumers themselves and yet they are the source of all funding has to come from them consumer stock ownership plan financing is a variation one of the variations of the of the aesop which would simultaneously build the ownership into the consumers as the capital is paid for as paid for anyway it's paid for a ts really mightiest day is used to tell me with no sense of feeling that this was socially irresponsible that the steel workers couldn't care less what happened to the price of steel as a result of their labor contracts that was not the responsibility of the union and indeed particularly in periods of weight stabilization during world war two and again and even more so in the korean war  the union became the chief lobbyist for the industry in getting price increases through the government stabilization machinery just so that they could then the companies would have the money to pay a wage increase which was dictated by a government board the weight stabilization board would come down with an order then the union open go through the back door of the white house  not in the header is the survival of our st of all the cost of the defense effort the korean war was a big consumer of steel and still is a matter of fact and even in terms of what has happened to the steel industry recently this was part of what started it down the bog and is the extraordinary end of the week we do not in our comments connect that process with the fact typical steel worker can't buy a home today and into heat as he got a job at a mozo you may have a job but but in this process we price the ability to buy out of the market at this very nd the power to man going into business will not ever own a home just as a footnote the steel worker who can't buy a home is by and large those who still have jobs and that certainly a dwindling number is earning double or triple what the average worker in america aspect you know the worker says his company has just gone aesop and you now collectively own sixty percent seventy percent perhaps even eighty percent of the total equity in that corporation but he still sees the old experiences and perhaps he could talk a little about how people like comet date and recognize that it is possible to be owners and at the same time not get into an anarchist tick situation wh ownership and management are functionally different things the function of the owners to protect his capital and to collect the wages of his capital a function of the manager is to manage and there are certain characteristics that go with that that doesn't mean that one who enters the labor force as a janitor shouldn't with competence as many of our great heroes of industry did fight his way up educate himself climb up and then become the chairman of the market that mobility of course has to be maintained and it's his term precious but the thing that begins to make changes occurred is when dividends begin to flow always life he can collect the wages of his capital in the meanwhile and it is possible to for corporations using the right technology and senator long as a bill in congress to improve thing that we were discussing earlier corporations recognizing that it is very much in their interest to cut through some of these veils of secrecy make to let the employees in on all  of life affecting the corporation and what the executive salary levels are and all the rest of these things have been none of your business will that that the workers ought to know all those things and that also through these various participation all mechanisms the workers autonomous work teams you know in some auto plants now the workers have the right to stop the assembly line when they see something that's in the quality or the safety had the operation and i tone deafness areas is the area of the traditional robber baron capitalists who says what's the problem important thing is that if we take a hard look at what the united states constitution me in terms of there being two ways to earn income you cannot avoid the conclusion that it says that every citizen has the right to be productive and if if the going way in which goods and services are produced is primarily are heavily capital he's got a right to buy and paid for out of what he earns and to receive them you get exactly the same result under the equal protection clause equal protection cla that every citizen is entitled to equal protection of the law and access to credit capital credit is a matter of law then to give the rich access to credit to acquire more capital they don't need it say you could say to anyone that it bargains are the machines could say to every one of the airlines or the pilots or any one of the unions could say look you're planning to finance a certain amount of year we want to talk about financing that through us we think we can show you why it's more advantageous we believe we can convince you or you should know this without that we will be better you said has come out of this recent turmoil in the airlines is the degree to which unions at western air at eastern republic are all taking an initiative in discussing with their management give us up to twenty five percent of the stock in this company so that that is beginning to happen another price where where this whole thing is so timely is that we are undergoing as we said earlier this enormous change in the workplace because of the developments in the technological field and the need for brand new industries highly automated the workers in america and the labor movement has never been in its approach but there has been understandably great apprehension about the dislocated impact of these changes to provide friend and aesop's you've got the technology room what the direction in which we need to go so elementary and i'm often asked the question why it is absolutely beneficial to workers beneficial to companies beneficial to consumers beneficial to finance beneficial to the economy in the sense of eliminating inflation why is it not done by everyone exactly why the unions are the answer asked me only don't hear there's your problem he starts out with the good book that said he's created in the image of god and so he's created but but it didn't go on in the fine print in say in the st thing he's going korea's machines and they go take his job that water right there was being shown through but i remember this i went through the plant that the people who were on various console's monitoring the equipment all seemed very pleased with their do responsibilities and so on but was just as jolly as he could be and he said but he says see that machine he says that machine is supposed to handle all of this stuff but they made the tolerances so exact that any real thing that's a little bit off and so on  going to liberate among the tech needs of finance that the employer the underlying logic of the aesop are methods that can build ownership into any identifiable constituency because the logic is the basic logic of capital finance what what he what these techniques do is make credit capital credit to buy capital accessible to economically underpowered people  since been proven to be an understatement firstly there were four hundred and twenty thousand residents in alaska everyone would have been made a shareholder at the outset from the purchase price would be a bid in six hundred million dollars that was the depreciated book value it would pay for itself in four dollars and a half years so in the fifty year it would begin to pay four thousand dollars in i all my life i've wanted to do this now i'm going to thing but but you know yeah well i said all right maybe i'll help you feel better i've asked that question well i'm one hundred people or more and they all say the same thing i think man was not born to touch my own i think that he is full of things to do that he's he's become distorted as a result of the workaday world maybe it won't be a generation or two to we really it if you have a situation where you're not going to you can lose your toil but you could begin to have an ownership of your income so you could be freed up there would be the full liberty potentiality of the moment that makes this a very pregnant moment of the broader evolution of the world and united states economy and society it's a very pretty good time there are many so say say so we've had two gentlemen here that have labored mightily in their careers in terms of helping to bring an understanding of the broader implications that could help us all lead in that direction is incredibly exciting moment i'm terribly sorry originator of aesop and the techniques for generally expanding ownership of the technological means of production in the american world economy happy to bring able to bring you those perceptions and i'd like to tune in again next week so we're right on time for this week so you know if we can do  once again thank you very much indeed for participating and for everything