The worker cooperatives organized in the era of artisan labor paralleled, in many ways, the forms of work organization that are arising today.  Networked organization, crowdsourced credit and the implosion of capital outlays required for physical production, taken together, are recreating the same conditions that made artisan cooperatives feasible in the days before the factory system.  In the artisan manufactories that prevailed into the early 19th century, most of the physical capital required for production was owned by the work force; artisan laborers could walk out and essentially take the firm with them in all but name.  Likewise, today, the collapse of capital outlay requirements for production in the cultural and information fields (software, desktop publishing, music, etc.) has created a situation in which human capital is the source of most book value for many firms;  consequently, workers are able to walk out with their human capital and form “breakaway firms,” leaving their former employers as little more than hollow shells.  And the rise of cheap garage manufacturing machinery (a Fab Lab with homebrew CNC tools costing maybe two months’ wages for a semi-skilled worker) is, in its essence, a return to the days when low physical capital costs made worker cooperatives a viable alternative to wage labor.

Fifth, and most challenging, we can work to reverse the divergence between the centre and the periphery. The previous four elements would help with this. But greater policy efforts are needed to give regions, where possible, a critical mass of knowledge jobs so they can connect with the leading economic activity in national centres.

These changes are not, on the whole, the fault of globalisation, that scapegoat of the populist insurgency, but of technology-driven changes combined with policies that have reinforced the underlying forces of divergence.

What I Think Should Be Done  For the previously explained reasons, I believe that capitalism is a fundamentally sound system that is now not working well for the majority of people, so it must be reformed to provide many more equal opportunities and to be more productive. To make the changes, I believe something like the following is needed.  Leadership from the top. I have a principle that you will not effect change unless you affect the people who have their hands on the levers of power so that they move them to change things the way you want them to change. So there need to be powerful forces from the top of the country that proclaim the income/wealth/opportunity gap to be a national emergency and take on the responsibility for reengineering the system so that it works better. Bipartisan and skilled shapers of policy working together to redesign the system so it works better. I believe that we will do this in a bipartisan and skilled way or we will hurt each other. So I believe the leadership should create a bipartisan commission to bring together skilled people from different communities to come up with a plan to reengineer the system to simultaneously divide and increase the economic pie better. That plan will show how to raise money and spend/invest it well to produce good double bottom line returns. Clear metrics that can be used to judge success and hold the people in charge accountable for achieving it. In running the things I run, I like to have clear metrics that show how those who are responsible for things are doing and have rewards and punishments that are based on how these metrics change. Having these would produce the accountability and feedback loop that are required to achieve success. To the extent possible, I’d bring that sort of accountability down to the individual level to encourage an accountability culture in which individuals are aware of whether they are net contributors or net detractors to the society, and the individuals and the society make attempts to make them net contributors.   Redistribution of resources that will improve both the well-beings and the productivities of the vast majority of people. As an economic engineer, naturally I think about how money might be obtained from taxes, borrowing, businesses, and philanthropy, and how it would flow to affect prices and economies. For example, I think about how a change in personal tax rates might occur and how changes in them relative to corporate tax rates would affect how money would flow, and how changes in tax rates in one location relative to another location would drive flows and outcomes in them. I also think a lot about how the money raised will be spent—e.g., how much will be spent on programs that will improve both social and economic outcomes, and how much will be redistributive. Such decisions would of course be up to the people on the bipartisan commission and the leadership to decide and are way too complicated an engineering exercise for me to opine on here. I can, however, give my big picture inclinations. Above all else, I’d want to achieve good double bottom line results. To do that I’d:

The pursuit of profit and greater efficiencies has led to the invention of new technologies that replace people, which has made companies run more efficiently, rewarded those who invented these technologies, and hurt those who were replaced by them. This force will accelerate over the next several years, and there is no plan to deal with it well.