They write that, “Poverty is human-made. It is created – knowingly and with scientific efficiency – by a vastly sophisticated industry that includes private companies, think tanks, media outlets, government policies, and more. This ‘Poverty Creation Industry’ is about the least talked about feature of our global economy and yet it is perhaps the greatest market force in the modern world. Until we acknowledge this startling truth, progress towards global prosperity and sustainability will fall far short of what is possible.”

“It happens in big boardrooms and political conferences, where people create rules and execute strategies to ‘maximise self-interest’ as economists say, by extracting wealth from others. This is largely driven by a maniacal focus on short-term profit or advantage while ignoring one of its primary effects – the impoverishment of hundreds of millions of people.”

The industry is amazingly successful, the richest 0.001% of the world control 30% of the financial wealth; the wealthiest 0.1% about 81%. Somewhere between $21 and $32 trillion – or 10%-15% of all privately held wealth – is hidden behind the great walls of secrecy. Of the 100 largest companies on the London Stock Exchange, 98 routinely use tax havens. Over half of all global trade flows between and within them so that profits can be siphoned off untaxed.

Want to do something about this despicable state of affairs that places the fate of the world in a perilous state? Check out /The Rules, a new global citizens movement aimed at tackling these root causes of inequality and poverty. The Rules is one of the most important and impactful new organizations to come along in the past decade. Coming together in common purpose and with a common understanding, using smart organizing and global communication networks, The Rules believes that ordinary people have the power to stand up to the Poverty Creation Industry, and bring about new rules. Their first step is to demand transparency in the global hub of the tax haven system, the City of London.

They need your help! Get involved today.

Wall Street is booming while nearly 22 million Americans are unemployed or underemployed. Corporations and the wealthy are thriving while almost 50 million of their fellow Americans are living in poverty—that is one in every six people. This means that we all know, or are ourselves, one of those struggling to get by. Meanwhile, our elected officials, most of whom receive money from corporations and the wealthy, bumble along, proposing one poor solution after another and barely getting anything accomplished.

We can’t wait for top-down solutions—we need to make change ourselves. Worker-owned cooperatives have a huge potential to reshape our economy at the local, national, and international level. There are roughly 30,000 co-ops across several industries in the U.S., of which about 300 are owned by workers. In these businesses, every worker has a say in how the business is run—one member, one share, one vote. These democratic workplaces keep money and resources within their communities and tend to be more resilient in bad times because the workers have incentives to pull together instead of going under.

The potential of worker co-ops in the U.S. hasn’t been fully actualized yet: In other parts of the world cooperatives have raised the standard of living and lifted regions out of economic hardship. For example, thanks to cooperatives, Italy’s Emilia Romagna boasts some of the lowest unemployment rates and highest standards of living in Europe, despite the ongoing worldwide recession. They achieved this through hard work, systematic cooperation, and making important legal changes—all of which we could apply here in the U.S.

Because the concept of cooperatively owned entities is not commonplace in the States, there are several legal and educational hurdles people must confront when they start their own co-op. We need to push for changes in our laws to support cooperative businesses. More states should have statutes that favor local, worker-owned enterprises as a way to bolster their local economies. For example, laws that allow workers to have the right of first refusal could help keep businesses from being sold and moved overseas.

Right now, only Massachusetts, Connecticut, Maine, Vermont, and New York have incorporation statutes for worker co-ops. People can work around that by structuring their bylaws to be more in line with cooperative practices, yet legal and tax issues are still more difficult to manage. The most recommended form of co-op is the “unincorporated co-op” because, in addition to being financed by member share purchases, member loans, bank loans, and retained earnings, it can also be financed by the sale of shares to non-patrons without a ceiling of 8-10% of return on those shares. Only Wyoming, Minnesota, Wisconsin, Iowa, Tennessee, Utah, and Nebraska have the unincorporated co-op in their statutes. More states should have this as part of their statute to make it easier for co-ops to be initially and continuously financed.

In addition to legal changes, we need robust educational resources to guide people through the process of starting and running a democratic workplace. This is where my worker co-op, the Toolbox for Education and Social Action (TESA), comes in. We have developed an expertise in building educational resources to help people start and manage their own worker co-ops. We believe democratic education is the best way to teach people about alternative economics, social change, and movement building. What sets our work apart is that all of our resources—be they workshops, curriculum, or games—embody the principles we are teaching at their very core.

We work closely with leaders in the field to develop these resources. Most people who are actively working in a co-op don’t have the time to devote to making educational products; when their knowledge goes untapped, it is a loss to the cooperative community. So we collaborate with these cooperators, combining their knowledge with our tools to design educational resources that can guide best practices in other cooperative businesses.

Building a cooperative economy will not be fast, but we can set ourselves up for success if we continue actively pushing for legal changes and educating people about how to create their own worker-owned enterprises. We should not remain beholden to a system that privileges the few while letting millions of others hold jobs that barely allow them to survive. Instead, we need to restructure our economy so that it favors workers over corporations, empowering and lifting employees out of poverty and setting families and their communities on the path toward thriving.

I’m somewhat obsessed with the concept of “externalities” and its companion concept developed to capture them, “full cost accounting.” “Externalities” are the costs and negative impacts imposed by businesses onto society and the environment that are not paid for by those businesses. Manufacturing puts pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab. In this way, businesses privatize profits and publicize costs.

Recently Trucost on behalf of The Economics of Ecosystems and Biodiversity (TEEB) took pen to paper to make some macro/global calculations of what the total costs of externalization are (check out a recent report [PDF] done by Trucost, an environmental consultancy sponsored by United Nations Environmental Program.)

TEEB asked Trucost to tally up the total “unpriced natural capital” consumed by the world’s top industrial sectors. (“Natural capital” refers to ecological materials and services like, say, clean water or a stable atmosphere that are damaged or destroyed by business; “unpriced” means that businesses don’t pay to consume them.)

This is a huge task; also hugely important. Doing it required a specific methodology that built in a series of assumptions. The report serves as a critically important signpost pointing the way to the truth about the cost and impact of externalities.

Here’s how those impacts break down based on an analysis of the report by Dave Roberts in Grist. He calculates that:

“The majority of unpriced natural capital costs are from greenhouse gas emissions (38%), followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%).

“So how much is that costing us? Trucost’s headline results are fairly stunning.

“First, the total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP.

(A “region-sector” is a particular industry in a particular region — say, wheat farming in East Asia.)

“Second, surprising no one, coal is the enemy of the human race. Trucost compiled rankings, both of the top environmental impacts and of the top industrial culprits.

Here are the top five biggest environmental impacts and the region-sectors responsible for them:

Not surprisingly the biggest single environmental cost is greenhouse gases from burning coal in China, and the fifth biggest results from burning coal in North America.

Here are the top five industrial sectors ranked by total ecological damages imposed:

Roberts concludes, “Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated.

“Ponder that for a moment.

“None of the world’s top industrial sectors would be profitable if they were paying their full freight. None! As legendary environmentalist Paul Hawken put it, “We are stealing the future, selling it in the present, and calling it GDP.”

What we need is not just better accounting, but a totally new global accounting and industrial system, a new way to practice capitalism, a new way to think about the economy and a new way of providing for human wellbeing.

The other day, I threw a paper cup in the trash. There was no recycling bin in the vicinity and I was in a rush. Normally I am pretty conscious of the environment, but there are times when I slip up, and the guilt can be somewhat overwhelming. A lot of us, especially in my generation (the “Millennials”) carry around a specific feeling of guilt when it comes to shirking our environmental responsibilities.

Responsibilities. That word carries a lot of weight. Is my generation responsible for the current environmental crisis? I’d argue not totally – after all, we didn’t design the destructive system we were born into, but we are perpetuating it. Are we responsible for curbing this crisis? Yes, we are.

Millennials are the subject of a lot of chatter these days: What kind of consumers are we? Do we care about others or just ourselves? What impact does social media have on our lives, and what about our future? A new batch of surveys recently came out that basically concluded that Millennials care about the destruction of the environment, but not enough to actually do something about it. I want to argue that on a very basic level, my generation does care about the environment but has a tough time doing something about it for two reasons. One, confusion. Two, we feel our actions are meaningless, in other words, we feel helpless.

We are confused about and lack understanding of how to do better. We are confused and overwhelmed with the amount of information we are bombarded with each day about GMOs in food, chemicals in this, oil spills here, CO2 emissions out of control, methane leaks and tar sand pipeline construction, all leading to the grand destruction of the planet. At a certain point, this overload  of information we obtain from various sources starts to dull the senses and we may start to tune out the negative information. What we can do, we do. What we don’t know how to do, we won’t, and if it’s too much to handle, we’ll tune it out and go about our lives. Knowledge is great, and being aware of the situation we are in is extremely important, but can be tied to the feeling of helplessness that many of us suffer from.

Everyday we see images and read stories of tragic environmental destruction and evidence of accelerating climate change and we ask ourselves, how much could recycling one bottle really do in the grand scheme of things? Didn’t Exxon Mobile just pump millions of tons of CO2 in the air, and why are they still allowed to destroy our planet? We ask questions, but the only answer that we can deduce is that profit is more important than people and in essence, more important than our future. So if we accept the fact that the fossil fuel industry is still receiving favorable tax treatment and tax payer subsidies even, is it fair that my generation feels guilty when we leave the water running or when we can’t afford to buy an electric vehicle? We feel it – the guilt – but we also feel too helpless to do anything about it.

Small steps are great and every small amount each individual does will contribute to a better environment, but when we are witnessing industries destroying our earth literally before our eyes (thanks to Twitter and Facebook) we start to wonder why can’t they do something about it, don’t they have a responsibility as well? If they took on the responsibility, then maybe my generation will have the desire and ability to make big strides in treating our planet better.

Our confusion and our helplessness is something that can be fixed. My generation is not perfect, and I will not fully pass on the blame to others, but we must all play a part and all do our duty to ensure a sustainable future. Maybe we sometimes “pretend” to care about the environment, but we feel helpless to counter the huge problems we have inherited.

Today the four biggest banks in the US – JPMorganChase, Citigroup, Wells Fargo and Bank of America have benefitted from the repeal of the Glass-Steagall act of 1933, which essentially allowed commercial banks to engage in securities activities. At the most basic level, the act had forced a separation of commercial and investment banks by preventing commercial banks from underwriting securities, with the exception of U.S. Treasury and federal agency securities, and municipal and state general-obligation securities. Likewise, investment banks were not allowed to engage in the business of receiving federally insured consumer and business deposits. This all changed in 1999 when the Gramm-Leach-Biley Act repealed the Glass-Steagall’s restrictions on bank and securities-firm affiliations. This initiative inevitably led to consumer and business deposits getting mixed up with investments in and the promotion of risky, poorly run companies because the opportunity to raise the rate of return was too hard to resist. “Investment analysis” got confused with “a sales pitch” (NY Times) and as Ronald Glantz told Congress in 2001, “Now the job of analysts is to bring in investment banking clients, not provide good investment advice.”

For years this has been going on – commercial banks engaging in investment firm activities – giving unsound investment advice in order to push sales.  Now we are learning that HSBC and other major banks have gained so much power since the Gramm-Leach-Biley Act that not only are they gambling with people’s money but they are in fact illegally accepting deposits, investing, transferring and essentially hiding money for terrorist organizations and greedily fabricating the LIBOR interest rates. Last year reports streamed in detailing HSBC’s laundry list of illegal activities which included supplying aircrafts to Mexican drug dealers, and moving millions of dollars to a firm called Tajco, run by the Tajideen brothers – who are major financiers of Hezbollah. Evading laws was (and is) commonplace in the HSBC workplace, as entire programs were actually developed within the bank to convince the government that they were remediating their illegal activities when in reality these programs did absolutely nothing.

What started as a conjoining of commercial and investment banks, which is a problem in and of itself, has ballooned to a situation in which bankers wield so much power they are able to go above the law and commit crimes – without being prosecuted. Because of their immense power, the federal government is openly afraid to prosecute for fear of another economic collapse.

So, when you hear battlecries of “break up the banks” that is what is being referred to: not only making the banks smaller but also separating investment firms from commercial banks to begin to strip them of their ubiquitous power and stranglehold on the government.

They have so much power, but we have the power to make choices too. Invest your money in a local credit union that you trust.  Putting money in local credit unions or cooperatives isn’t going to solve everything, but wouldn’t you rather put your money in something you trust then let a few greedy banks do as they please?

As a critique of corporate behavior for 25 years, Michael Moss’s story convinced me to add US consumer food companies such as Pepsi, Kraft and General Mills to part of America’s evil corporate empire that already includes the banking and finance industry, the chemical industry, and the defense industry together with the US Chamber of Commerce.

Is every company in these industries evil? Certainly not, but too many of them have acted with a blatant disregard for reasonable moral and ethical behavior.

A few highlights from Moss’s story:

At a meeting in 1999 that engaged the CEOs of some of the largest food companies in the country, they were presented with a vivid picture of the emerging obesity crisis. The presenter was none other than one of their own, a senior executive at Kraft, who basically laid the emerging obesity crisis at the feet of the processed food industry and pleaded with them to do something collectively to turn the corner.

What happened?

Industry food executives responded by saying, “Look, we’re already providing people with choices in the grocery store. We are committed to nutrition, as we are to convenience and low prices.”  But what they meant to say was that they were worried about the lost billions in sales if the healthier products they created weren’t as addictive as the garbage they now make.

Salt, sugar, and fat are the three pillars, the Holy Grail on which the food industry survives. And through their research, the industry knows that, “when they hit the perfect amounts of each of those ingredients, they’ll send us over the moon, products will fly off the shelves, we’ll eat more, we’ll buy more—and being companies, of course, that they will make more money.”

Obesity is an epidemic by design, as is diabetes. Americans are sick and no amount of health insurance is likely to make us better. It’s time to recognize that the food industry is the new tobacco industry and start taking action in the same way.

According to the survey, older workers fared slightly better during the recession than younger workers. Nineteen percent of workers age 55 and older were laid off from a job compared to 23% of workers ages 34 to 54 and 28% of workers ages 18 to 34. As of 2013, fourteen percent of younger workers are unemployed and looking for work — a figure well above the recent national unemployment estimates — while just 8% of middle-aged workers say the same. Underemployment is also rampant. Close to 50% of respondents say that they took either a lower paying job after being laid off or their current job is a “step down” from their past one.

What happens when roughly 14% of those under 35 are looking for work? How about when those under 35 are balancing 3 jobs to cover the cost of living and their costly education? Noteworthy is McKinsey’s 2000 projection that Millennials will hold up to 11 jobs before reaching the age of 38. Imagine looking into a 30 year mortgage in one location on a house, unsure of whether your current job will last – not that easy. When young people are still struggling to get a secure, well-paying job, other markets struggle because of it. A strong home-owner market is one of the cornerstones of a healthy economy. When Millennials are putting off the decision to settle down and start a family due to uncertainty in the job market combined with increased educational debt, it bodes badly for the US economy.

The notion of disposable workers, or “labor market flexibility” (letting companies fire employees on a whim) goes hand in hand with the Millennial’s plight. Although companies fare better when they treat employees as an investment, cultivating the right employee, most still use the practice of constant hiring and firing, which is extremely costly. Not only is it bad for the company, but it compounds the Millennial’s uncertainty, giving rise to the next generation of workers in the US economy: those that are not settling down anytime soon. While the economic recovery may look fine for a few (read: the top 1%), what fails to gain any traction is an emphasis on helping out the new wave of workers that are anxious to enter the workforce in a meaningful way.

Sources:

http://www.heldrich.rutgers.edu/sites/default/files/content/Work_Trends_February_2013.pdf

http://www.nakedcapitalism.com/2013/02/disposable-workers-why-throwaway-employees-are-bad-policy.html

http://www.nakedcapitalism.com/2011/06/the-social-cost-of-the-loss-of-job-stability-and-careers.html

Consider these North American statistics:

From 1980 to 2011 – the overall loss burden from weather catastrophes was US$ 1,060bn. The insured losses amounted to US$ 510bn over this timeframe and some 30,000 people lost their lives due to weather catastrophes in North America during this time frame.

Hurricane Katrina in 2005 was the costliest event ever recorded in the US with US$ 62.2bn insured losses and overall losses of US$ 125bn, Katrina was also the deadliest single storm event, claiming 1,322 lives.

More recently, in 2011, NOAA calculated 14 extreme weather and climate events that reached the billion-dollar threshold in losses.  In 2012, while there were less extreme weather events (11), economic losses grew by 66%, from $60 billion in 2011 to $100 billion from just Sandy alone.

Those are some staggering numbers, yet most of us believe we have escaped the devastation. We see the pictures on TV. There is something mesmerizing about these gigantic storms. Weather has become a “hot” TV topic breeding numerous shows about those who brave extreme weather. The impact that these numbers have had on the lives of “other” people is almost impossible to understand. It’s not about days without power, but entire lives, family history, social networks, careers and so much more gone in a matter of hours.

We hear about weather disasters all around the world that are almost certainly magnified if not caused by global climate change, and we feel sadness and distress, but most of us are still not convinced that what happens to others will, one day happens to us. When we take, we take from ourselves. We all breathe in the pollution that is swept up in the air. When the disaster hits, we all suffer because we all ultimately pay for the restoration. We are all interconnected on this one planet.

When big business doesn’t pull its weight by mitigating it’s CO2 emissions, we are all pulled down.

Munich Re has repeatedly warned insurance companies to account for impending natural disasters, the same must be done by other corporate entities. Shouldn’t a business account for the negative externalaties they are contributing to? Every day, corporations across the US are polluting the air, dumping waste and toxins into waterways and using raw materials at a rate that the planet cannot replace. This natural capital depletion – water, minerals, clean air, a healthy planet – is taken for granted by most companies, and why not, they are usually not made to pay for it. By taking what we all should share, we all end up poor.

As author Jeremy Rifkin notes, to build a more empathetic society, we must bring out our inherent empathetic sociability – the ability to see that we are all interconnected on this one planet. We all need to realize that when we use a resource and don’t replace it, or don’t account for it, we are taking from not just somebody else, but from all of humanity. Building an empathetic society would recognize that climate-related weather events happen to us all no matter where we happen to be located at the exact moment the disaster hits. We, and big business, need to do more to recognize and proactively mitigate these impending disasters.

You may be asking, how can a faceless multi-national corporation display signs of empathy for their fellow humans. Good question, and it starts with deeply engraining a sense of society into the work and family culture as well as the educational system. The Nordic Countries of Finland, Denmark, Sweden and Norway have consistently ranked the highest in the field of corporate citizenship mainly due to the integration of social and environments concerns that are at the core of the Nordic culture into the company culture. The empathetic values of gender equality, equality and fair usage of natural resources are engrained into the Nordic corporation’s business model.

The problem isn’t just the corporation – it’s the society that we live in that has allowed most corporations to take over the destiny of our planet and to disregard the humanness of doing business. The first step in reversing this trend starts with ourselves, recognizing that we are all interconnected and we all suffer when there is suffering. We all pay when one doesn’t pay. The second step is more practical, and that entails and overhaul of the traditional business model: putting an end to the unaccounted and unsustainable usage of natural resources by which corporations are undermining the health of our planet.

Now that we can grasp the true depth of the problem, what do we do about it? If you’re feeling hopeless, you’re not alone. It’s a complicated struggle with tough solutions.

As an article in the Atlantic recently pointed out, some solutions include unlikely ones like capping salaries, (which I wrote about in a previous post called 580) probably wouldn’t work in our competitive business culture.  Other solutions such as giving shareholders more say in the compensation of their executives and banning “golden parachutes” for outgoing executives, could be adopted, with enough public support. In fact, Switzerland -  the banking capital of the world – recently did enact this law, making it a crime for a CEO to get paid too much. You can read more about this in an article by the Economist.

There are solutions to the problem of wealth inequality, some might take a long time, some can be implemented now, but we need those in Washington to listen to the struggling middle class and the ones getting hurt by the system. Business owners who care about the issue should join the 200,000 members of the American Sustainable Business Council that works for better standards in business practices and fair executive compensation. With enough support and participation, solutions can be found.

SOCAP: Soul Boston – Social Capital Market’s first east coast event – will be held on Saturday, March 9th at MIT’s sustainably innovative Stata.

What if your job, your finances, and your community were all aligned with what you value? SOCAP has created a special one-day event, SOCAP: Soul, to help answer that question and explore how change starts within us.

SOCAP: Soul Boston – Social Capital Market’s first east coast event – will be held on Saturday, March 9th at MIT’s whimsical and sustainably innovative Stata Center. The event will kick-off at 8 am with registration and breakfast, followed by a day of soul searching content, conversation, and food all the way into a music-filled evening party to close the event.

Panelists who have worked on aligning their own lives with their values will be speaking on topics such as ‘Small Steps to Accelerate the Good Economy’,’When to Give and When to Invest’ and more. Learn more here http://soulboston.socialcapitalmarkets.net/

The event will kick-off at 8 am with registration and breakfast, followed by a day of soul searching content, conversation, and food all the way into a music-filled evening party to close the event.

Panelists who have worked on aligning their own lives with their values will be speaking on topics such as ‘Small Steps to Accelerate the Good Economy’,’When to Give and When to Invest’ and more. I will be speaking on one of the panels and also leading a breakout session.

Register for SOCAP: Soul
Tickets are $95 dollars and include access to the event’s online networking community, a full day of content, meals and an evening party. Space is limited!