Economics

Corporate greed, State monopoly & Strengthening the Plural Sector

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The plural sector is to consist of organizations that are neither State-owned nor privately invested. Sounds absurd? They do exist.

My last article explored the idea of why Capitalistic principles have led us to an ever-widening disparity between the rich and the poor. So far, people tend to favor or disfavor Capitalism. Right wingers see no alternative to the existing Capitalism. Left wingers see anti-capitalistic alternatives like socialism and communism.

In summary of my previous article; History bares witness to the flaws of Socialism, the present depicts a failing Capitalistic system and the future we seek should not be either of the situations mentioned prior. So what is the Alternative? A system where there is a balance between the core principles of both Socialism and Capitalism. Within this article I wish to introduce an upcoming idea to seek this balance through a concept that is only just emerging; strengthening of the ‘plural sector’.

Before we delve into this plausible solution it is best to be acquainted with the term ‘plural sector’. So, What is referred to as the ‘plural sector’?

Modern society tends to be largely divided in to two major sectors. The National Governments and their associated institutes making up of the public sector, whereas various privately owned companies and share-holder based corporations consist of the private sector. However, there exists a third and final sector that is not accounted for; the ‘plural sector’.

So what exactly does the plural sector consist of? One of the reasons this sector is overlooked is perhaps, solely because of the absence of clear-cut criteria to distinguish it. However, the idea of the plural sector is to consist of organizations that are neither State-owned nor privately invested. Examples include, Member-owned Cooperatives, Non-owned Cooperatives, and Non-governmental Organizations.

Note that I previously used the term ‘Cooperative’ over more commonly used words like ‘Company’ or ‘Cooperation’. As opposed to the latter, Cooperatives tend to apply concepts of sharing and democracy. Simply put, all members of the organization are held responsible for the functioning and the beneficial output of the organization.

Although highly overlooked in modern society, the plural sector plays a vital part in community development. The last time a water pump brought access to clean water to the Biraro community in Rwanda, it was not the work of the State Government nor a CSR project funded by a Multi-billion-dollar company – it was the work of a local NGO. Think for a second about who truly mingles with the under-privileged. Other than the rare few, which politicians, either state or communal, in your locality or electorate visit the under-privileged without an election round the corner. Doesn’t the amount of time and money CSR projects require pale in comparison to the millions of dollars spent on marketing campaigns or sponsorships for politicians? Ultimately, those who work to represent and raise communal voices are who consists of the ‘plural sector’.

All of this leads to the final question, ‘how exactly can we use the plural sector to rebalance society?’. To answer this, let us first refer to how the sectors interact in modern society.

In most countries, Capitalism is sought after for it is commonly accepted that ‘money makes the world go round’. This results in a very strong and independent private sector that dominates the national economic structures ranging anywhere from 40 – 50%. The public sector also has a steady footing with about 30 – 40% of the economic structure under their control. This leaves the plural sector to spread across a much smaller percentage of about 10 – 20%.

Since the private and public sectors have such high percentages, at any given time economic structures favour one of the two. This means that just like a see-saw we are travelling back and forth between the two, which makes the economy unstable. This is where the idea of ‘Strengthening the Plural Sector’ fits in.

If we strengthen the plural sector to expand and become increasingly more independent, the percentage the plural sector covers in the modern economic structure can rise up to around 30%. This makes both the private and public structures to occupy a relatively lesser percentage. It is almost like adding another plank to the see-saw to make a pyramid like shape, which makes it relatively more stable.

The ‘plural sector’ has its own special purpose. It consists of Organizations that works toward community benefits. Think about ‘Think Tanks, NGOs, Credit Unions’. All of them work for and represent a certain community. This is unique to this sector just as ‘profit motivation’ is unique to the Private Sector. This establishes a very special characteristic: the plural sector does not interact with either the private or public sectors. This allows the ‘plural sector’ to be independent and not swayed by either of the other two sectors. This ultimately results in 33% stability at all times over the economic structure. Almost like a perfectly stable leg on a three-legged stool. Even if the other two legs are unstable, because of that perfectly stable third leg, the stool has minimal risk of toppling over.

I hope that I have sparked some interest in you on the concept of ‘Strengthening the Plural Sector’. However there is one thing we should always remember: this is still just a theory, and the problems we may encounter in putting this into practice are hard to foresee. At the same time I acknowledge that there are still many questions regarding this concept and many different views on whether it is plausible or not, and if it is, how it will strengthen the ‘public sector’. Hopefully, with time this concept will gain more awareness and many opinions and plausible courses of action will be sought after.

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