1. The principle of ‘subsidiarity’ shoul apply, meaning keep the state’s role at the lowest level of government practical–say counties, or metro areas, or bioregions. Of course, some things require national and global regulation and investment intervention, but the principle still applies.

2. Right wing talk radio, and some libertarian economists, argue that government creates nothing of value itself, but only employs others, less efficiently, to do so. They’re wrong on both counts. First, government can and does create value– information in myriad forms, some quite valuable and obtainable in no other practical way, information that can in turn be used to create further wealth and health for the common good. Second, many infrastructures, especially those of high design and sustainability, are beyond the reach of private firms in pulling together the overal project. I’m thinking of China’s recent joint effort with several European alliances to build 10 or 20 brand new futuristic, medium-sized ‘eco-cities’ to handle a rural population displaced by the inductialization of agriculture.

Labor should encourage the state to take a much more active role in the economy – not through price-fixing or direct management of enterprises – but in wealth creation in general.

For example, why shouldn’t the state (at any level of government) set up investment funds that can provide patient capital to small business start-ups, expansions and networks of businesses?

The key to a high performance/low unemployment/high standard of living economy is effective wealth redistribution in the context of a dynamic, entrepreneurial High Road business sector (private, co-op, hybrid, etc.).

Right now most of the debate about government’s role focuses on providing incentives (usually tax breaks) to big companies (generally a multinational)that choose to locate in one state and not the other.

The return on investment for the state in question here is dubious at best. This kind of focus ignores where most employment is created: in small and medium businesses with less than 500 employees.

A tax credit means much less to these businesses than an effective workforce development system, a technology-transfer infrastructure, support for expanding capacity, training existing employees, expanding into new markets, networking with other companies.

Then there’s the issue of succession: the majority of businesses are privately held, which means the owner or owners will want to retire… in the majority of cases they have no succession plan. This provides labor and communities with an opportunity to step into wealth creation directly and root productive assets locally. (A change in the social relations of production on a small scale?)

The form (co-op & ESOP) exists, but an adequate supply of patient capital and technical assistance to help in the development of high performing, democratic workplaces is in short supply.

Jacoby looks to Unions in Europe longingly because they pressure their governments for social services, etc. but they also take a much more active and important role. There unions strike when they don’t like their company’s business plan. They see it not only as a being practical but also as being their duty. That means GM and Ford workers should strike not over pay or firings, but over things like a short term business model that depends on selling in-efficient cars. That is, unions should take direct responsibility for the character and nature of the economy, their industries and companies, not expecting the government to do it for them. All of this in the context of developing educational institutions, technology, etc. The important thing is that Labor take the lead in doing these things and that it reach it out to the portions of the business sector that want to do the same.