What Happened When China Joined the WTO?

Video: OMC español

Economically, the United States saw some benefits and some downsides.

  • Consumers broadly benefited from China’s WTO entry because they could buy goods from China at lower prices.
  • Corporations profited from increased access to China’s massive market. In 2017, for example, China accounted for about 20 percent of Apple’s sales, and since 2001, the value of U.S. agricultural exports to China increased by 1,000 percent.
  • However, labor unions in manufacturing and factory work opposed a WTO accession deal, certain that cheaper labor in China would cost jobs in the United States. And they were right: between 1999 and 2011, almost 6 million U.S. manufacturing jobs were lost. A landmark study attributed nearly 1 million of those manufacturing job losses, and 2.4 million total job losses, to competition from China. But because major technological advances such as automation occurred in that same time frame, economists disagree about exactly how responsible Chinese competition was for job losses in manufacturing.

Meanwhile, for China, the economic impact has been remarkably positive:

  • Since 1999, more than four hundred million Chinese people have been lifted from extreme poverty (living on less than $1.90 a day).
  • China’s economy is eight times larger than it was in 2001.
  • Trade in goods between the United States and China increased more than thirty times, from less than $8 billion in 1986 to over $578 billion in 2016. China surpassed Germany to become the world’s largest exporter of goods in 2009.

Source: https://world101.cfr.org/global-era-issues/trade/what-happened-when-china-joined-wto

Video: CNN Chile

Video: teleSUR tv

SERVIR: Unas 150 Mil personas laborarían en el estado en situación de informalidad

  • Informalidad laboral en el Estado ascendería a 11%. Personas que laboran en condición de informalidad suelen ser contratadas indebidamente bajo la modalidad de locación de servicios.
  • SERVIR recuerda a entidades públicas que sólo pueden contratar locadores de servicios para labores no subordinadas, bajo responsabilidad del titular.

Imagen: http://www.servir.gob.pe/wp-content/uploads/2017/07/Captura-de-pantalla-2017-07-25-a-las-10.51.47.png

La Autoridad Nacional del Servicio Civil (SERVIR) señaló que el nivel de 11% de informalidad laboral aún existente en el sector público, es una de las principales razones para profundizar la reforma del servicio civil y la meritocracia en el Estado peruano, según el informe denominado “El reto de la formalidad en el sector público peruano” publicado hoy.

En el referido informe se señala que existirían unas 150 mil personas, el 11% del total que están al servicio del Estado, que laborarían en condición de informalidad laboral en el sector público, en vista que, según la Encuesta Nacional de Hogares del INEI, siendo subordinadas serían contratadas vía locación de servicios en el mejor de los casos, figura que sólo puede ser usada para labores no subordinadas.

“A pesar que realizarían labores subordinadas en una entidad, no estarían registradas en las planillas, por tanto, no accederían a beneficios laborales tales como vacaciones, aguinaldos, compensación por tiempo de servicios, seguridad social en salud y pensiones, entre otros”, señala el informe.

La mayor tasa de informalidad laboral en el sector público se registraría en los gobiernos locales (26%), seguida del gobierno nacional (13%) y los gobiernos regionales (6%). SERVIR señala que, no obstante, la tasa de informalidad laboral del sector público que ascendería a 11%, resultaría significativamente inferior a la del sector privado, que asciende a 55%.

“La significativa presencia de personas contratadas indebidamente como locadores en el Estado se explicaría por la intención de evitar las restricciones impuestas a las entidades –previstas en las leyes anuales de presupuesto- para contratar personal en planilla. También por la prohibición de contratar personal CAS en los proyectos de inversión pública y por la mayor flexibilidad para contratar locadores en comparación con los trámites requeridos para contratar personal subordinado, entre otros”, apunta SERVIR.


Para SERVIR, el tránsito de las entidades públicas a la Ley del Servicio Civil, minimizará el uso indebido de la locación de servicios en el Estado, considerando que -salvo los puestos de confianza- el acceso al servicio civil se realiza por concurso público de méritos.

Adicionalmente, señala que, en su momento, se podrá utilizar la modalidad de contratación a plazo fijo regulada en la Ley del Servicio Civil, en los proyectos de inversión pública, con el fin de evitar el uso inapropiado de la contratación por locación de servicios.

Otra recomendación a las entidades es aplicar con mayor rigurosidad el Reglamento General de la Ley del Servicio Civil, que indica que las entidades públicas “solo pueden contratar a personas naturales bajo la figura de locación de servicios para realizar labores no subordinadas, bajo responsabilidad del titular de la entidad”.

Para ver y descargar el Informe “El reto de la formalidad en el sector público peruano” hacer click aquí

Lima, 25 de julio de 2017
Subjefatura de Comunicaciones e Imagen Institucional

En: servir

‘Back to the Future II” From a Legal Perspective: Unintentionally Visionary


Courtesy of Universal Pictures – ‘Back to the Future II’. Image: http://www.hollywoodreporter.com/thr-esq/back-future-ii-a-legal-833705

The inside story of Crispin Glover’s lawsuit over George McFly: Was an actor hired to mimic another actor playing a character?

Yes, there were hoverboards, drones, wearable tech, videoconferencing and even a baseball team in Miami. Back to the Future Part II also brought back George McFly, the father of the protagonist traveling to Oct. 21, 2015, which as everybody knows, is this date in history.Except George McFly wasn’t played by the same actor, Crispin Glover, who appeared in the first film. Glover didn’t like the sequel’s script, and so he threw out a $1 million demand to reprise the role. The filmmakers refused, and so they took a face mold of Glover that was created during the first film to help out the makeup artists, hired a different actor, Jeffrey Weissman, and through the use of prosthetics, made it appear as though the same thespian was performing the part.

Back to the Future II is today being celebrated as visionary in many respects, but let’s not forget the legal drama that ensued after this happened. The 1990 lawsuit that Glover filed against Universal Pictures for violating his right of publicity predated other famous cases including Vanna White’s lawsuit over a Wheel of Fortune robot hostess in a blond wig and Gwen Stefani’s legal action over a digital avatar in the Band Hero video game. Glover’s case never got far enough in the court to set legal precedent, but it is often invoked when actors like Fast & Furious star Paul Walker become indisposed and filmmakers contemplate tricky ways to resurrect performances. The advance of technologies like holograms, with the potential of reviving dead stars and allowing living ones to be in multiple places, tends to invite discussion of wonderful possibilities and legal limits. Enter Glover and his unwitting participation in a film for the ages — and a lawsuit that Philip K. Dick would have loved.

“Had they only hired another actor, which is kind of what I thought had happened, that would have been totally legal, and I would have been completely fine with it,” said Glover in a radio interview last year, pointing out that the film switched the actresses playing Marty McFly’s girlfriend without resorting to prosthetics.

The use of an old face mold went too far.

Glover sued, and according to Doug Kari, his attorney at the time, the complaint itself was purposefully short and simple.

“I kept the factual details out of the complaint, preferring that we hold our cards close to the vest,” says Kari. “Having interviewed Jeffrey Weissman, the replacement actor, in the privacy of my office, I knew that we held some aces.”

Kari says that Weissman had gone to Glover feeling a bit disturbed by the role and what was happening on the set of Back to the Future II. There, others were referring to him as “Crispin.” (Weissman wasn’t available to comment.)

“Jeffrey told me a story that one day, [executive producer] Steven Spielberg walked on set and laughed and said, ‘Hey Crispin, I see you got your million,’ ” says Kari. “To me, those anecdotes showed they were trying to take Crispin’s persona.”

Universal filed a demurrer, arguing that the publicity rights claim should fail because the filmmakers were only trying to perpetuate the George McFly character. As the dispute heated up, Glover and Kari began to have conversations with each other about the future of computer graphic technology and how what was being done to Glover might impact other actors. The argument was passed along to the judge.

“What I said to the judge was, ‘Things may happen in the future that will make this important,’ ” says Kari. “We need to draw a line.”

The judge rejected Universal’s bid to toss the lawsuit. What’s more, she agreed to let Kari depose director Robert Zemeckis, screenwriter Bob Gale, actor Michael J. Fox, Spielberg and others. The plaintiff also wanted a complete accounting of the finances of Back to the Future II because a demand was being made for a share of the film’s profits.

Taking the parties into chambers, the judge strongly urged settlement. A deal was indeed made, reportedly for $760,000 at the behest of the company that insured Universal. (Attorneys wouldn’t confirm the amount.)

The settlement unfortunately left a lot of uncertainty as to where the proper line is. Studios often recast roles. Hiring an actor that looks like a predecessor might be fine. Hiring an actor that is made up to look like a predecessor might not be. The line is blurry to say the least.

When Glover brought his case, the U.S. Supreme Court had already affirmed the value of a performer’s right of publicity. The high court examined a man named Hugo Zacchini who performed a human cannonball act suing a local Ohio TV station for showing his act. “The broadcast of a film of petitioner’s entire act poses a substantial threat to the economic value of that performance,” wrote Justice Bryan White.

In the years that followed Glover’s lawsuit, there would be substantive developments in the law. In 2001, looking at an artist who sold lithographs bearing the faces of the Three Stooges, the California Supreme Court put forward a test of “whether the depiction or imitation of the celebrity is the very sum and substance of the work in question.” Ten years later, examining Stefani’s lawsuit against Activision over a digital avatar, a California appeals court refined the test toward an examination into the transformative nature of the work, agreeing with the singer’s contention that motion-captured re-creations of her likeness was too “realistic” to qualify as such. Earlier this year, the 9th Circuit Court of Appeals considered that ruling when reviving a case brought by former professional football players suing over Madden NFL. It’s a decision that’s now being petitioned for review by the Supreme Court.

The Glover case was similar to Stefani’s with respect to a performer who once did something (agreeing to perform) without any expectation or contractual understanding of how it would later be used. Regarding Back to the Future II, the parties struggled to elucidate the difference between perpetuating character and ripping off someone’s identity. Glover found enough of a legal advantage to advance, and had the case gone to trial, his lawyer would have shown a jury the way in which the movie spliced together clips from the original film showing Glover with remade clips of an actor posing as Glover being George McFly. The case didn’t get there because of the settlement, but maybe the dispute had some psychological impact on those involved. Zemeckis, for example, would go on to helm Forrest Gump, which spliced historical footage to create the illusion that the main character was meeting Presidents John F. Kennedy, Lyndon B. Johnson and Richard Nixon.

In recent years, Glover has taken credit for changing Screen Actors Guild rules on the illicit use of actors. Kari believes that’s accurate, though a spokesperson for SAG-AFTRA says the guild can’t identify changes to its agreements. Nevertheless, the Glover case did raise quite a bit of consciousness throughout Hollywood about the possibilities and risks of reusing an actor’s performance and has become quite excellent shorthand for the types of publicity rights disputes inherent in new technologies. It’s quite amazing that the Chicago Cubs are making a World Series run this year, but nobody should forget the unintentionally visionary nature of the George McFly character in the film.

In: thr.com

Read also: Back to the Future: 13 Things you May not Know


How bosses are (literally) like dictators

Americans think they live in a democracy. But their workplaces are small tyrannies.

Some Amazon warehouse workers have complained about being pushed beyond their abilities by their bosses. Boston Globe / Getty

Updated by  Jul 17, 2017, 8:20am EDT

Consider some facts about how American employers control their workers. Amazon prohibits employees from exchanging casual remarks while on duty, calling this “time theft.” Apple inspects the personal belongings of its retail workers, some of whom lose up to a half-hour of unpaid time every day as they wait in line to be searched. Tyson prevents its poultry workers from using the bathroom. Some have been forced to urinate on themselves while their supervisors mock them.

About half of US employees have been subject to suspicionless drug screening by their employers. Millions are pressured by their employers to support particular political causes or candidates. Soon employers will be empowered to withhold contraception coveragefrom their employees’ health insurance. They already have the right to penalize workers for failure to exercise and diet, by charging them higher health insurance premiums.

How should we understand these sweeping powers that employers have to regulate their employees’ lives, both on and off duty? Most people don’t use the term in this context, but wherever some have the authority to issue orders to others, backed by sanctions, in some domain of life, that authority is a government

We usually assume that “government” refers to state authorities. Yet the state is only one kind of government. Every organization needs some way to govern itself — to designate who has authority to make decisions concerning its affairs, what their powers are, and what consequences they may mete out to those beneath them in the organizational chart who fail to do their part in carrying out the organization’s decisions.

Managers in private firms can impose, for almost any reason, sanctions including job loss, demotion, pay cuts, worse hours, worse conditions, and harassment. The top managers of firms are therefore the heads of little governments, who rule their workers while they are at work — and often even when they are off duty.

Every government has a constitution, which determines whether it is a democracy, a dictatorship, or something else. In a democracy like the United States, the government is “public.” This means it is properly the business of the governed: transparent to them and servant to their interests. They have a voice and the power to hold rulers accountable.

Not every government is public in this way. When King Louis XIV of France said, “L’etat, c’est moi,” he meant that his government was his business alone, something he kept private from those he governed. They weren’t entitled to know how he operated it, had no standing to insist he take their interests into account in his decisions, and no right to hold him accountable for his actions.

Over time, national governments have become “public,” but in the US workplace governments remain resolutely “private”

Like Louis XIV’s government, the typical American workplace is kept private from those it governs. Managers often conceal decisions of vital interest to their workers. Often, they don’t even give advance notice of firm closures and layoffs. They are free to sacrifice workers’ dignity in dominating and humiliating their subordinates. Most employer harassment of workers is perfectly legal, as long as bosses mete it out on an equal-opportunity basis. (Walmart and Amazon managers are notorious for berating and belittling their workers.) And workers have virtually no power to hold their bosses accountable for such abuses: They can’t fire their bosses, and can’t sue them for mistreatment except in a very narrow range of cases, mostly having to do with discrimination.

Why are workers subject to private government? The state has set the default terms of the constitution of workplace government through its employment laws. The most important source of employers’ power is the default rule of employment at will. Unless the parties have otherwise agreed, employers are free to fire workers for almost any or no reason. This amounts to an effective grant of power to employers to rule the lives of their employees in almost any respect — not just on the job but off duty as well. And they have exercised that power.

Scotts, the lawn care company, fired an employee for smoking off duty. After Rep. Rodney Frelinghuysen (R-NJ) notified Lakeland Bank that an employee had complained he wasn’t holding town hall meetings, the bank intimidated her into resigning. San Diego Christian College fired a teacher for having premarital sex — and hired her fiancé to fill her post. Bosses are dictators, and workers are their subjects.

American public discourse doesn’t give us helpful ways to talk about the dictatorial rule of employers. Instead, we talk as if workers aren’t ruled by their bosses. We are told that unregulated markets make us free, and that the only threat to our liberties is the state. We are told that in the market, all transactions are voluntary. We are told that since workers freely enter and exit the labor contract, they are perfectly free under it. We prize our skepticism about “government,” without extending our critique to workplace dictatorship.

The earliest champions of free markets envisioned a world of self-employment

Why do we talk like this? The answer takes us back to free market ideas developed before the Industrial Revolution. In 17th- and 18th-century Britain, big merchants got the state to grant them monopolies over trade in particular goods, forcing small craftsmen to submit to their regulations. A handful of aristocratic families enjoyed a monopoly on land, due to primogeniture and entail, which barred the breakup and sale of any part of large estates. Farmers could rent their land only on short-term leases, which forced them to bow and scrape before their landlords, in a condition of subordination not much different from servants, who lived in their masters’ households and had to obey their rules.

The problem was that the state had rigged the rules of the market in favor of the rich. Confronted with this economic situation, many people argued that free markets would promote equality and workers’ interests by enabling them to go into business for themselves and thereby escapesubordination to the owners of capital.

No wonder some of the early advocates of free markets in 17th-century England were called “Levellers.” These radicals, who emerged during the English civil war, wanted to abolish the monopolies held by the big merchants and aristocrats. They saw the prospects of greater equality that might come from opening up to ordinary workers opportunities for manufacture, trade, and farming one’s own land.

Marchers in Burford, England, celebrate the “levellers,” who sought to overthrow monopolies in the 17th century. Tim Graham / Getty

In the 18th century, Adam Smith was the greatest advocate for the view that replacing monopolies, primogeniture, entail, and involuntary servitude with free markets would enable laborers to work on their own behalf. His key assumption was that incentives were more powerful than economies of scale. When workers get to keep all of the fruits of their labor, as they do when self-employed, they will work much harder and more efficiently than if they are employed by a master, who takes a cut of what they produce. Indolent aristocratic landowners can’t compete with yeoman farmers without laws preventing land sales. Free markets in land, labor, and commerce will therefore lead to the triumph of the most efficient producer, the self-employed worker, and the demise of the idle, stupid, rent-seeking rentier.

Smith and his contemporaries looked across the Atlantic and saw that America appeared to be realizing these hopes — although only for white men. The great majority of the free population in the Revolutionary period was self-employed, as either a yeoman farmer or an independent artisan or merchant.

In the United States, Thomas Paine was the great promoter of this vision. Indeed, his views on political economy sound as if they could have been ripped out of the GOP Freedom Caucus playbook. Paine argued that individuals can solve nearly all of their problems on their own, without state meddling. A good government does nothing more than secure individuals in “peace and safety” in the free pursuit of their occupations, with the lowest possible tax burden. Taxation is theft. People living off government pay are social parasites. Government is the chief cause of poverty. Paine was a lifelong advocate of commerce, free trade, and free markets. He called for hard money and fiscal responsibility.

Paine was the hero of labor radicals for decades after his death in 1809, because they shared his hope that free markets would yield an economy almost entirely composed of small proprietors. An economy of small proprietors offers a plausible model of a free society of equals: each individual personally independent, none taking orders from anyone else, everyone middle class.

Abraham Lincoln built on the vision of Smith and Paine, which helped to shape the two key planks of the Republican Party platform: opposition to the extension of slavery in the territories, and the Homestead Act. Slavery, after all, enabled masters to accumulate vast tracts of land, squeezing out small farmers and forcing them into wage labor. Prohibiting the extension of slavery into the territories and giving away small plots of land to anyone who would work it would realize a society of equals in which no one is ever consigned to wage labor for life. Lincoln, who helped create the political party that now defends the interests of business, never wavered from the proposition that true free labor meant freedom from wage labor.

The Industrial Revolution, however — well underway by Lincoln’s time — ultimately dashed the hopes of joining free markets with independent labor in a society of equals. Smith’s prediction — that economies of scale would be less important than the incentive effects of enabling workers to reap all the fruits of their labor — was defeated by industrial technologies that required massive accumulations of capital. The US, with its access to territories seized from Native Americans, was able to stave off the bankruptcy of self-employed farmers and other small proprietors for far longer than Europe. But industrialization, population growth, the closure of the frontier, and railroad monopolies doomed the sole proprietorship to the margins of the economy, even in North America.

The Industrial Revolution gave employers new powers over workers, but economists failed to adjust their vocabulary — or their analyses

The Smith-Paine-Lincoln libertarian vision was rendered largely irrelevant by industrialization, which created a new model of wage labor, with large companies taking the place of large landowners. Yet strangely, many people persist in using Smith’s and Paine’s rhetoric to describe the world we live in today. We are told that our choice is between free markets and state control — but most adults live their working lives under a third thing entirely: private government. A vision of what egalitarians hoped market society would deliver before the Industrial Revolution — a world without private workplace government, with producers interacting only through markets and the state — has been blindly carried over to the modern economy by libertarians and their pro-business fellow travelers.

There is a condition called hemiagnosia, whose sufferers cannot perceive one half of their bodies. A large class of libertarian-leaning thinkers and politicians, with considerable public following, resemble patients with this condition: They cannot perceive half of the economy — the half that takes place beyond the market, after the employment contract is accepted, where workers are subject to private, arbitrary, unaccountable government.

What can we do about this? Americans are used to complaining about how government regulation restricts our freedom. So we should recognize that such complaints apply, with at least as much force, to private governments of the workplace. For while the punishments employers can impose for disobedience aren’t as severe as those available to the state, the scope of employers’ authority over workers is more sweeping and exacting, its power more arbitrary and unaccountable. Therefore, it is high time we considered remedies for reining in the private government of the workplace similar to those we have long insisted should apply to the state.

Three types of remedy are of special importance. First, recall a key demand the United States made of communist dictatorships during the Cold War: Let dissenters leave. Although workers are formally free to leave their workplace dictatorships, they often pay a steep price. Nearly one-fifth of American workers labor under noncompete clauses. This means they can’t work in the same industry if they quit or are fired.

And it’s not just engineers and other “knowledge economy” workers who are restricted in this way: Even some minimum wage workers are forced to sign noncompetes. Workers who must leave their human capital behind are not truly free to quit. Every state should follow California’s example and ban noncompete clauses from work contracts.

We should clarify the rights that workers possess, and then defend them

Second, consider that if the state imposed surveillance and regulations on us in anything like the way that private employers do, we would rightly protest that our constitutional rights were being violated. American workers have few such rights against their bosses, and the rights they have are very weakly enforced. We should strengthen the constitutional rights that workers have against their employers, and rigorously enforce the ones the law already purports to recognize.

A Manchester clothes mill, 1909. This is not the world Adam Smith envisioned when he championed free markets. Topical Press Agency / Getty

Among the most important of these rights are to freedom of speech and association. This means employers shouldn’t be able to regulate workers’ off-duty speech and association, or informal non-harassing talk during breaks or on duty, if it does not unduly interfere with job performance. Nor should they be able to prevent workers from supporting the candidate of their choice.

Third, we should make the government of the workplace more public (in the sense that political scientists use the term). Workers need a real voice in how they are governed — not just the right to complain without getting fired, but an organized way to insist that their interests have weight in decisions about how work is organized.

One way to do this would be to strengthen the rights of labor unions to organize. Labor unions are a vital tool for checking abusive and exploitative employers. However, due to lax enforcement of laws protecting the right to organize and discuss workplace complaints, many workers are fired for these activities. And many workers shy away from unionization, because they prefer a collaborative to an adversarial relationship to their employer.

Yet even when employers are decent, workers could still use a voice. In many of the rich states of Europe, they already have one, even if they don’t belong to a union. It’s called “co-determination” — a system of joint workplace governance by workers and managers, which automatically applies to firms with more than a few dozen employees. Under co-determination, workers elect representatives to a works council, which participates in decision-making concerning hours, layoffs, plant closures, workplace conditions, and processes. Workers in publicly traded firms also elect some members of the board of directors of the firm.

Against these proposals, libertarian and neoliberal economists theorize that workers somehow suffer from provisions that would secure their dignity, autonomy, and voice at work. That’s because the efficiency of firms would, in theory, drop — along with profits, and therefore wages — if managers did not have maximum control of their workforce. These thinkers insist that employers already compensate workers for any “oppressive” conditions that may exist by offering higher wages. Workers are therefore free to make the trade-off between wages and workplace freedom when they seek a job.

This theory supposes, unrealistically, that entry-level workers already know how well they will be treated when they apply for jobs at different workplaces, and that low-paid workers have ready access to decent working conditions in the first place. It’s telling that the same workers who suffer the worst working conditions also suffer from massive wage theft. One study estimates that employers failed to pay $50 billion in legally mandated wages in one year. Two-thirds of workers in low-wage industries suffered wage theft, costing them nearly 15 percent of their total earnings. This is three times the amount of all other thefts in the United States.

If employers have such contempt for their employees that they steal their wages, how likely is it that they are making it up to them with better working conditions?

It’s also easy to theorize that workers are better off under employer dictatorship, because managers supposedly know best to govern the workplace efficiently. But if efficiency means that workers are forced to pee in their pants, why shouldn’t they have a say in whether such “efficiency” is worthwhile? The long history of American workers’ struggles to get the right to use the bathroom at work — something long enjoyed by our European counterparts — says enough about economists’ stunted notion of efficiency.

Meanwhile, our false rhetoric of workers’ “choice” continues to obscure the ways the state is handing ever more power to workplace dictators. The Trump administration’s Labor Department is working to roll back the Obama administration’s expansion of overtime pay. It is giving a free pass to federal contractors who have violated workplace safety and federal wage and hours laws. It has canceled the paycheck transparency rule, making it harder for women to know when they are being paid less for the same work as men.

Private government is arbitrary, unaccountable government. That’s what most Americans are subject to at work. The history of democracy is the history of turning governance from a private matter into a public one. It has been about making government public — answerable to the interests of citizens and not just the interests of their rulers. It’s time to apply the lessons we have learned from this history to the private government of the workplace. Workers deserve a voice not just on Capitol Hill but in Amazon warehouses, Silicon Valley technology companies, and meat-processing plants as well.

Elizabeth Anderson is the Arthur F. Thurnau Professor and John Dewey Distinguished University Professor of Philosophy and Women’s studies at the University of Michigan. She is the author of Private Government: How Employers Rule Our Lives (and Why We Don’t Talk About It) (Princeton University Press, 2017).

In: vox

Member-Managed LLCs Versus Manager-Managed LLCs

Learn the difference between the two different management structures for LLCs.

Image: https://tingenwilliams.com/wp-content/uploads/2017/06/AdobeStock_57614259-e1498234014331-1000×450.jpeg

When you form a limited liability company (“LLC”), you will need to decide how your LLC will be managed. With LLCs, there are two different possible management structures. You can choose to have a member-managed LLC where all the members (owners) participate in running the business. Or, you can have a manager-managed LLC where only designated members, or certain nonmembers/outsiders, or a combination of members and nonmembers are given the responsibility to run the business. The other members in a manager-managed LLC are passive investors who are not involved in business operations.

Member-Managed LLCs: The More Common Choice

Most people who set up an LLC choose member-management, meaning that all the members share responsibility for the day-to-day running of the business. This approach is more common in part because most LLCs are small businesses with limited resources and they don’t need a separate management level to operate. Unlike corporations, LLCs have a streamlined organizational structure, without officers or boards of directors. As a result, the LLC form is often chosen by people who want to be directly involved in managing and operating their business.

If you and the other members of your LLC want to run your own business—actually make and sell products, take orders, provide services—then you will want a member-management structure for your LLC. For example, if your LLC is a bakery and all your LLC members want to play an active role in the business — crafting recipes, baking goods, hiring employees, opening and closing the shop — then you will want to operate the LLC as member-managers.

In most states, LLCs are member-managed by default under state law. This means that if you don’t designate a management structure for your LLC either in your formation documents or operating agreement, then it will be considered a member-managed organization.

Manager-Management: Better in Certain Circumstances

In some situations, a manager-management structure may be preferable. The most common example is when some members only want to be passive investors in the business. These owners often feel more comfortable if the LLC delegates management responsibilities to one or more other members (or nonmembers).

Two other situations where LLC owners may prefer a manager-management structure are: (1) when your business or ownership is too large, diverse, or complex to efficiently allow for sharing management among all members; or (2) when some of your members are not particularly skilled at management. (Sometimes, of course, these two situations go together.) Delegating management to a smaller group of people or just one person can be an effective way of balancing the varied skills and interests of multiple LLC members. It can also ensure more competent management of the business.

While LLCs that appoint managers often rely on one or more of their own members to fill the role, you can hire a nonmember as manager.

Document Your Choice

If you choose member-management, you may not be required to formally document this choice anywhere (although many states ask you to state whether your LLC will be member-managed or manager-managed in the articles of organization that you file to form your LLC). Nevertheless, all LLCs should have a written operating agreement that defines the basic rights and responsibilities of the members (and managers, if you have them). In a member-managed LLC, this would include things like member voting rights, additional capital contributions, buy-out provisions, and other important management and operational issues for the owners. Without an operating agreement, you run the risk of finding yourselves in a full-blown crisis when something unexpected arises because basic issues weren’t clearly addressed and agreed to early on.

If you choose manager-management for your LLC, there very likely will be a legal requirement that you clearly spell out this choice somewhere in your LLC’s organizational documents. Typically this is either in the articles of organization that you file with the state or your operating agreement. In addition to the items mentioned above for members that you want to include in an operating agreement, you also will want your agreement to address what authority and responsibilities the manager, or managers, will have. For example, will the managers have sole authority for all hiring decisions? What about equipment purchases? Just like with the member provisions, documenting the extent of the manager’s—or managers’— authority can help avoid problems down the road.

If you fail to create your own operating agreement, then your state’s LLC rules will apply. These are not necessarily the rules that you want for your business so make sure you have your own written agreement for your LLC.

For more details about setting up a manager-managed LLC, see Nolo’s article on manager-management for LLCs.

In: nolo

The Great Transportation Conspiracy – National City Lines and related corporate conspiracies to destroy America’s electrified mass-transit systems from the 1930’s into the present

The BHRA is a non-profit organization, where most of the work is done primarily by volunteers. Although we are a non-profit, we are a real railroad, not just a museum! BHRA is a turn-key engineering organization, certified in electric railroad construction.

Streetcar. Image: https://upload.wikimedia.org/wikipedia/commons/thumb/5/56/Streetcar_in_New_Orleans%2C_USA1.jpg/1200px-Streetcar_in_New_Orleans%2C_USA1.jpg

National City Lines Conspiracy and Conviction in Federal Court:

“Mass transit didn’t just die, it was murdered”  Kwitny, 1981

“When GM and a few other big companies created a transportation oligopoly for the internal-combustion engine  . . . they did not rely just on the obvious sales pitch.  They conspired.  They broke the law. . . in 1949 a jury convicted the corporations and several executives of criminal antitrust violations for their part in the demise of mass transit.  The convictions were upheld on appeal.”   Kwitny, 1981

The above quotes refer to the infamous anti-mass transit “National City Lines Conspiracy” led by General Motors, Standard Oil and Firestone Tires.  The above quotes by Jonathan Kwitny are taken from page 14 of the Feb 1981 edition of Harper’s Magazine (PDF).  It is a truly exceptional article.

In 1949, National City Lines were convicted in Federal court (and in 1951 the conviction was upheld) for destroying the electrified rail and electric bus transit systems in 44 American cities.  Beginning in 1937, National City Lines embarked on a nationwide campaign to induce cities (by aggressively pushing “an offer you can’t refuse” of G.M. /National City Lines financing – at the height of a 12 year long, world-wide economic depression) to scrap electrically powered streetcars and trolley-buses, which G.M. did not make, and to substitute gasoline powered buses manufactured by G.M., burning Standard Oil gasoline, and rolling on Firestone rubber tires.  When National City Lines would aquire a transit system, the trolley rails would be ripped up, the overhead wires would be cut down, and the system would be converted to buses within 90 days.  It’s noteworthy that New York City’s electrified surface transportation system was National City Lines first victim (see the video “Taken For A Ride”).

Strangely, although the Federal Government won the case against G.M., it never imposed any penalty on the company other than extremely small symbolic fines. Perhaps at the time, the Truman administration felt it needed the undivided assistance of G.M. in fighting the Korean War, and pursuing the “Cold War” against the former Soviet Union, more than it needed a national, privately financed and operated all electric mass transit system.

The National City Lines controversy didn’t just go away:

GM’s role in Monopolizing the Sale of Buses for municipal use:

In 1971, the City Of New York led a class action anti-trust lawsuit of 300 localities against G.M. in federal court (PDF) for price fixing and price gouging in the sale of G.M. buses to municipalities. See NY times article (PDF). 

GM’s role in the destruction of intercity rail, suppression of alternative energies and more:

In 1972, then U.S. Senator Ted Kennedy called for a Federal investigation into G.M.’s alleged conspiratorial destruction of the U.S. rail industry and public mass transit industry, in order to facilitate the sale of automobiles.  (see NY Times article (PDF))

At the time, this subject was brought to the attention of Senator Kennedy by NYC based labor attorney and transportation expert Theodore W. Kheel and Ralph Nader associate Bradford C. Snell (see PDF streetcar conspiracy article by Snell and the video “Taken For A Ride”).  Snell was then a San Francisco based attorney, who worked on NYC’s anti-trust bus lawsuit against G.M.

This led to Senate Bill 1167 of 1974 “The Industrial Reorganization Act” and the now little known Ground Transportation Hearings of April 1974 – which were sidetracked by the resignation of then U.S. President Richard Nixon on August 8, 1974 (Watergate). G.M. was literally “saved by the bell”…

In 1974, during the height of the first “Energy Crisis”, the U.S. Senate re-investigated General Motors for its involvement in not only the intentional destruction of the U.S. Streetcar industry, but also G.M.’s direct involvement in the intentional destruction of the U.S. rail freight and passenger rail industry, the systematic suppression of U.S. alternative energy sources, and energy efficient automobile engines, as well as providing direct material aide to Nazi Germany during WWII in the critical areas of military truck manufacture, and military airplane and jet engine manufacture.

Part 4a through appendix  of 1974 Senate Investigation document can be read here (78mb PDF)
Part 4 of 1974 Senate Investigation document can be read here (40mb PDF)

So is the “Unholy Trinity” of the National City Lines Conspiracy still in effect today?

If so in a current corporate context this Unholy Trinity may include:

G.M. = NovaBus (builds CNG buses at the G.M. bus manufacturing plant in Quebec, Canada)
Standard Oil = Trillium USA (provides CNG bus fuel to nearly every U.S. municipal bus fleet)
Firestone Tire = Cato Institute / Wendell Cox / National Highway Users Alliance

Urban transportation planning and system design, pre-National City Lines conspiracy and decimation:

Before the criminal conspiracy that destroyed America’s mass transit systems, Heavy Rail (subways), electrified streetcars and electric bus lines formed an integrated system.  Such a system can still be found in San Francisco (America’s second densest populated city).  Although such an integrated system no longer exists in New York City, we once had such a system. The Brooklyn-Manhattan Transit Company (BMT) and it’s subsidiary Brooklyn and Queens Transit Company (B&QT) actually pioneered this type of integrated transit system.  A new type of vehicle was even created for this system, the PCC. During the 1920’s NYC transportation engineers and planners developed the following hierarchy of all urban electric transportation modes, as a function of corridor ridership density:

1. Heaviest density corridors to be serviced by subway/elevated
2. Electric Streetcar lines to feed subway/elevated lines
3. Electric Bus lines to feed the Streetcar lines

BHRA feels the best way to improve quality of life in urban communities, and truly get a handle on CO2 emissions in densely populated urban settings, is to return to a truly integrated and sensible mode of transportation planning.  This includes switching mass transit vehicles (along densely populated corridors) back from hydrocarbon combustion (in any form), to electric energy derived from low carbon footprint, renewable electrical generating sources.

A fascinating side note: National City Lines was complicit in maintaining Apartheid (“Jim Crow Laws”) in the American south:

“Rosa Parks was arrested for refusing to move to the back of the bus operated by Montgomery Bus Lines, a subsidiary of a National City Lines on 1 December 1955 which led to the Montgomery Bus Boycott. . . The boycott lasted for just over a year and ended only after a successful ruling by the Supreme Court that allowed black bus passengers to sit anywhere they wanted.” (from: National City Lines and the Montgomery Bus Boycott)

In: brooklynrail.net 

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