What is a Just Economy?

all sorts of things. But at the end of the day, it's this push and pull between the oligarchs, right, the mega capitalists that see the rest of us in the ninety nine percent as just cogs and a wheel that they grind and grind and grind out to increase their profits at the expense of our health, our happiness, and our ability to attain whatever version of the American dreams

still exists. And you know what, we all I think that what has come into our forefront, and particularly again looking at COVID nineteen and this being the time when we really had a moment, those of us that were privileged to take a pause and say, wait a minute,

why am I working in this way? Why am I giving ten twelve hours a day, to this capitalistic machine, to this firm, to this organization, to this company, right to this entity, only to be spit out right, only to have my wages stagnant, only to watch, as you know, the Jeff Bezos of the world want to think the

Amazon employees for sending them to fucking outer space. And so in my conversation today, was very excited to speak with Nick Romeo, who covers policy and ideas for The New Yorker and teaches in the Graduate School of Journalism at the University of Berkeley, because he has a new book, The Alternative, How to Build a Just Economy. And what I loved about our conversation is that it's some things that we know right, but it's other things that we don't know that Are we waiting for the one percent

to give us permission? Are we waiting for the oppressors to essentially decide that, oh, maybe I found my moral compass. Are there different options and opportunities for the rest of us that don't rely on the benevolence of people who have showed us just how greedy they can be. So in this book, The Alternative, How to Build a Just Economy, Nick Romeo discusses the terrifying trends of the early twenty first century, the widening inequality, environmental destruction, and the emiseration

of millions of workers around the world. And he talks about private markets and the efficiency of public ones, but basically coming to a place of is it possible to build an economy that works for the rest of us? And understand that capitalism was an idea, just like feudalism was an idea, So can we reimagine something better? That conversation with Nick Romeo is coming up next, folks. I am very excited to well come to ok F Daily

for the very first time. Nick Romeo, who covers policy and ideas for The New Yorker and teaches in the Graduate School of Journalism at the University of California, Berkeley, and is author of a new book that literally is hot on your shelves right now, The Alternative How to Build a Just Economy. Nick, let's start off with a couple of I have so many questions, but I want to start off with your definition of what a just economy is right versus what we understand as a economy

that we live in right now. What does it mean for you? To create a just economy.

design in a kind of broadly democratic sense. So rather than being regarded as a domain of technocratic expertise best left to experts, I think a just economy, and this, you know, flows pretty naturally from a commitment to democracy, I think it should reflect a kind of broad scale intentionality by people. At a more specific level, you know, my answer would have to do with things like wealth

inequality and climate change. I think those are two extraordinary challenges that any sort of just economy has to take quite seriously.

if we were them, we would do the same thing that they do. And so so long as we can keep our head above water, the rest of us are okay. Then COVID hit and I think that collectively we all began to really assess. Those of us that were privileged enough to be at home and work from home, we were able to pause and assess and see that, Wow, this system really is not right. You know, where sure people take taxes from us, government takes taxes, but when

we actually need those funds the most, it requires emergency. Right. And when we see that people are working two three four jobs, we make something sexy and we call it that gig economy. Right, We make it seem like it's fun to work for jobs in order to make ends meet. I wonder how you think that our understanding of how our system has been unjust right was really exacerbated during COVID and now makes room for your book, your alternatives in terms of how we are thinking, Like I just

think as workers. We've just been doing, and then there was this great pause, and now we're thinking about what we've been asked to do.

only scientists can understand. When they do understand it, the laws are inevitable, they can never be changed, and so the best you can do is just kind of struggle to get by, or if you happen to be in the top one percent, like you mentioned, you can maybe congratulate yourself and feel occasional pity for other people. If that so the target of a lot of critique, both within academic economics, but also you know, by people in the private sector and the public sector who are actually

pulling policy levers running businesses. I think at some level the target of critique is this inevitable view that the economy is a realm where morality has no place, and all we can do is follow laws that are akin

to the laws of physics. So, you know, in the book, I talk about a lot of people within academia who are trying to reform economics education in order to kind of expand our political imagination to say, actually, you know, a lot of key decisions about sort of distribution of resources, labor markets, quality of jobs, impacts on other people in

the natural world. These are fundamentally moral and political, and to regard them as just sort of like the mechanistic model that a lot of neoclassical economics has used is a mistake, and it's also a mistake that really benefits entrenched interests.

who benefits, who doesn't, who's left behind? How most of us are one emergency bill, one emergency visit to you know, the hospital, away from you know, bankruptcy, except we can't actually eat apply from bankruptcy, right Like you're not a corporation uberwealthy, right, So for the average person, there's no way out. What I think about is interesting and someone I want you to offer up some of the suggestions that you provide and solutions that you offer in the

book through your analysis. Is what it seems to me is that in order to make a change, though, there

needs to be a will to do so. And I'm not certain that the people that are in power, that are controlling the levers of power that are tilted towards their favor outside of there being some type of moral compass which I just have not seen over the past ten years, let alone the entirety of my career in politics, that there is a will that is there that they are incentivized by just feeling good about not hoarding all of their resources at the top and seeing that well workers,

these people are just expendable. So I'm wondering where will comes in to the solutions that you offer, and please do share some of the communal ways of operating and being like you did with examples of Patagonia and others.

You know, people talk a lot about retiring business owners. Estimates vary, but everyone agrees that a huge percentage of American GDP is represented by folks who are in their sixties and seve and these folks are on the point of transition. Now, transition can take multiple forms. You could sell your company or your business to private equity. You can make a lot of money doing that. But then

private equity may fire half of your staff. They'll certainly prioritize return on investment over wages and benefits for workers, or say, donations to organizations that support environmental causes. Now, a sale to private equity is not the only option for retiring business owners. One chapter in my book, I look at people who are converting the ownership structure of their businesses to a legal vehicle called a perpetual purpose trust.

And just like the name suggests, it exists in perpetuity, and it stipulates a purpose as the sort of defining reason, the basic motivation of the business. So rather than profit maximumation, your purpose might be, well, I talk about a bakery here in Oakland, California, where the purpose is to hire folks who are formerly homeless or incarcerated and to do profit sharing with employees. So now you know, anyone who wants to buy this business in the future has to

respect that purpose. So it's sort of protecting a social mission above the kind of standard profit maximizing one. And you know, there are enormous businesses doing this, like you mentioned. Patagonia is one example. So there's three billion dollar business using a purpose trust model. But there are also lots of smaller businesses, you know, people who might do three to five million dollars of revenue annually, all the way up to mid range, say fifty to one hundred million dollars.

And you know, if you aggregate this, it's it's it's not a trivial part of the American economy. And so I think there is some optimism with that kind of purpose trust model, although like you say, ultimately this hinges on a previous will, a previous moral commitment. So I agree with that point.

have a shared sense of responsibility? And you can look at countries that you know, we talk about on this show that have you know, robust healthcare systems because the money that was being drained out by taking care of those that were ill. It's just like, well, we can create this, like we have the resources and the tax dollars to do this. Again, to me, though, it comes back to the sense of who is the collective weed

that we want to do right by? And if we were, you know, if America was a homogenous type of place, then I could see, oh, yeah, let's move into this economy that is more of a shared economy, as people have said, where the workers get to have a piece and that incentivizes them. Didn't we have something like that where businesses offered pensions. You put in this amount of time for us, and then we're going to take care of you.

a once mighty American brand. You know, if if Amazon today had the same level of worker ownership that Seers department stores did in the nineteen fifties, Amazon workers and this is actually from twenty eighteen, so the figures would be higher now. But Amazon workers in twenty eighteen, each one would have owned about three hundred and eighty thousand dollars of equity and Amazon so, you know, think about

folks delivering packages, driving forklifts around warehouses. If all of those folks had, you know, today, it would be closer to a million dollars. I think Amazon stock has close to double since twenty eighteen. If all of those folks had hundreds of thousands of dollars of equity, that would go a long way towards creating a middle class. If you expand that model to the top one hundred businesses in America, you know, I think that that would be

a pretty extraordinary change. And it's it's just worth remembering that, yes, pensions used to be widespread, worker ownership used to be much more common. There's no sort of physical law akin to gravitation preventing this from being the case. Again. You know, another thing that comes to mind is the model of the Mandragon cooperatives in Spain, which I'm happy to talk about it.

feature of the model is really two elements. One is a six to one cap of highest to lowest worker pay. So if you're the CEO and I'm the lowest paid worker, you can never make six x what I do. So that's a key component of their model. Another key component is democratic governance. You know, people often talk about workplace democracy,

so what does that mean. It means that every worker gets a vote on key decisions, and these can be really impactful decisions like during the pandemic, should we decrease our hours to protect our long term interests or should we, you know, should we consider a new acquisition, do we want to buy another company, one worker, one vote on these decisions. So it's a kind of radically democratic model,

and it's also a model that limits wealth inequality. You know, one thing I really like that you said earlier is that wealth alone is sort of inadequate to give someone a good life. I quote in the book an engineer at Mandragon who had actually declined some competing job offers elsewhere in Spain where he would have made a lot more money, And what he said to me was, you know, I'd rather live here with a lot of friends than live alone like a king. I think the American dream, unfortunately,

is closer to living alone like a king. What I like about his comment is the suggestion that that's actually sort of a nightmare, right, that doesn't respond to sort of a basic aspect of humans, which is we like community, we like other people, and radical wealth inequality tends to erode those common bonds that make for a good life.

pay and all of these things. How does that pair into again, not just asking for the bare minimum, right like bathroom breaks right like, you know, not just asking for the bare minimum. But how does that kind of movement pair with what you're offering in your book, which is this robust alternative, multiple alternatives. We don't have to live this way under this system.

strong legislative headwinds, it's tough to organize. The field is kind of tilted against unions at this point. I think on doing that would be a great sort of policy goal. You know, one thing I talk a little bit about in the book, though, is that just like you said, it's sort of it's one thing to win a bare minimum, right, like maybe just enough of a wage increase that folks

can pay the rent, that they can afford food. But if you actually think about the kind of financial necessities in our current economy, given the cost of housing, the cost of a college education, wage increases alone are pretty unlikely to ever build up the sort of generational wealth that would allow people to buy a home in most parts of America to pay for college education for their

kids or their grandkids. I think for that level of wealth accumulation, we need to be thinking about more than wages. We need to be thinking about worker ownership, where value creation doesn't just flow away to shareholders, it goes directly to people who are day in and day out doing the work, whether that's at an Amazon or really anywhere else.

it's the economy, it's the economy. But how we talk about the economy and what we say about the economy doesn't from a political sphere, doesn't ever seem to land with workers in an a layman space. And so if you were offering up right to Biden, like we need to break open and have like you said, deep imagination, right, like, give people who are suffering from hopelessness a sense of what is possible, what would you say.

achieving more. You know, I think that really since NAFTA in the early nineties, the Democrats have not worked particularly hard for the working class. They've cared much more about the sort of wealthier sectors of the economy. So one key element I think is actually creating industrial jobs here in America. This is potentially bipartisan as well. Right, there are folks on the right who, whatever you think of their motives, they're concerned about supply chain security, they're concerned

about national security, they want more production onshore. So that's kind of one point. And then I guess the second point, not to be too much of a broken record, would be, you know, to make say, corporate tax breaks, if you have to have them, what if all of those were

contingent on extending worker ownership to all employees. So again, if we think about the one hundred largest companies in America, if they adopted even modest levels of worker ownership like Sears had in the nineteen fifties, you know, we could have millions of workers with hundreds of thousands of dollars

in equity. And I think that's the sort of change to folks circumstances that the Democrats, if they could point to that and say, well, look, now you have four hundred thousand dollars we believe in the working class, that would not be a hollow message, right, That would be a real achievement.