New Beyster Institute Project Rallies Advocates of Collective Ownership
By Anthony I. Mathews, Beyster Institute
In the past year, the Beyster Institute worked with 58 companies considering employee ownership; participated in projects with nearly two dozen universities; published and distributed teaching materials on employee ownership; and shared employee ownership expertise with MBA students, professors of entrepreneurship, professional advisers and those working in employee-owned companies. Overall we touched over 2,000 people, carrying the word about the role of employee ownership in making a better future.
The Institute has recently joined a workgroup funded by the Annie E. Casey Foundation that brings together credit union advocates, real estate trust experts, community development organizers and worker cooperative proponents. The group also includes representatives of some of the largest, most respected private foundations in the country with a common interest in exploring how the expansion of collective ownership vehicles might help create wealth in places where it is most needed and least likely to emerge on its own. These experts have realized that we have more in common than we differ, and that working together we are much more likely to have the effect we are all looking for.
Louis Kelso, creator of the employee stock ownership plan (ESOP), used to say that the only problem with capitalism is that it doesnï¿½t create enough capitalists. This work group is determined to find out if that is an immutable truth or one that can be affected by the operation of capitalismï¿½s own mechanisms.
The beginning principles of the workgroup are simple. Ownership of capital assets is the only effective way to develop personal security in this country and access to affordable credit is often a prerequisite to such ownership. Therefore, the two need to work hand in hand.
Those principles are pretty much undisputed. The problem is that access to capital ownership has been limited to a very small percentage of the population. During the last century, ownership of capital assets has become increasingly concentrated rather than widely distributed and there doesnï¿½t seem to be anything inherent in the nature of our economy to change that direction. Sometimes it seems as simple as “the rich get richer” and as immutable as “death and taxes,” but maybe not.
The one anomaly in that pattern—a bright spot from our perspective—is the use of collective ownership mechanisms that allow for the use of credit to achieve capital ownership by individuals who would not otherwise have access to it. We know very well the effect that employee stock ownership plans (ESOPs) can have. We have worked in the employee ownership community for many years and have seen the results first hand. Employee ownership creates wealth for people who would not have it otherwise, but ESOPs alone are not enough.
In order to make real changes, what is needed is an “extreme makeover: personal finance edition” in which all facets of life take advantage of this approach. Real estate trusts, worker cooperatives and credit unions all represent avenues into capital ownership that can be accessed by the general population, but so far no one is coordinating these efforts, so their efficiency is limited. The workgroup seeks to begin the process of coordinating all these divergent approaches with the acknowledgment that, from different directions, we are all headed to the same place.