Profile: Ben Walters

From busboy via real estate to trading to petro- chemicals, how the peripatetic life of Ben Walters

Lucy Knight profiles

BEN WALTERS

– founder of shoe company http://ospop.com/">OSPOP

Born in New York in the summer of 1975 Walters was the youngest of three with two older sisters. He grew up in North New Jersey where the family ran a petro-chemical business.

Upon graduating high school in 1993 he started at the University of Michigan. “When I was starting University I thought about taking business. I took some classes but when it came to submitting the application I changed by mind. The theoretical education that you get out of taking such a degree wasn’t motivation for me - a liberal arts education suited me better. History was something that I thought would give me skills, a sense of organisation.”

After completing his studies he went back to New Jersey where he started working as a driver but quickly progressed to working as a trader “I was there for a few months. Then I decided to leave and I packed up a car, without really thinking about what my aim was, and drove towards Jackson, Wyoming.”

Walters found it difficult to settle, preferring to ski and take various jobs in order to let him pursue his passion. “I was always living a life that was a means to an end, a basic lifestyle. I wanted to ski all the time.” Taking jobs in construction and restaurants Walters eventually began to work in real estate. “I thought I was just going to stay for the first winter and then it ended up being two years. I was still skiing a lot but I was working as a realtor full time by that point.”

The travelling bug bit again in 1999 and he took himself off down the West Coast down to South America through to Chile.

After yet another long trip he went back home to begin working for the family petro-chemical business. He started at the bottom, learning how everything functioned and then he ended up travelling selling commodity materials around the US. It was at this time that he sensed a good business opportunity emerging from the East, specifically in China.

“In 2002 it became clear that the basic goods business was starting to transfer overseas, it was becoming hard to compete with imported goods. There were now two global markets and my thought was that it would be wise to have a presence in China. I wanted to be able to integrate China into the business models of companies we were working with in the US.

“We were a small company but we had to compete with the big players so we had to add value. I knew we had to provide an on the ground window into the Chinese market.”

Walters decided to take it upon himself to be that window. “I had been to South East Asia on vacations a few times, Vietnam and Cambodia, two years prior to moving out here.” So, in 2003 he relocated to Shanghai.

It was not long after arriving in China that Walters became aware of the workman’s shoe that he has since transformed. Identifiable as a Chinese product says Walters, “the shoes are everywhere. They are sold on stalls and in construction type shops and they cost a couple of dollars.”

Walters bought himself a pair of the shoes and soon realised he had a potential product for the Western market. “The brand concept was industrial and commercial work wear, combined.”

For a Westerner to be making business inquiries was a shock for those Walters approached. “I contacted one factory. They had no export business and it took them by surprise.” This was the only factory Walters approached and they were the ones that took up his offer. Impressively all of this was done in Chinese. Shortly before going to Shanghai Walters had been taking Chinese lessons and then on arriving had spent five months spending up to seven hours a day practising. “I can speak it well, but it’s hard.”

The Tianlang shoe factory is based in Wen County, about 450 miles southwest of Beijing employing 400 people. The name of the shoe OSPOP stands for One Small Point of Pride. The workers here are paid more than the average for a factory and they get overtime. “It’s mostly miners and farmers out here. I first came to the factory in 2006 and they had no export business at all. The area was 97 per cent based on agriculture and mining, there was no industry really. This, for them, was a good opportunity.”

Walters then set about changing the shoe for a non-workman’s foot. “The shoe itself was a fairly poor quality product; work had to be done on modifying the shoe in order to sell it to Westerners. This was the biggest part of the process. We also had to educate the workers on making a cleaner product.”

But, he insists, this isn’t just a hammer and sickle on a t-shirt. “Authenticity is a huge deal to me. These shoes are the same but with more lasting ingredients. It’s a Chinese product that is used here and it’s marketed as such.”

It was Spring 2007 by the time Walters left his family’s business and concentrated full time on the shoes. Their current range was launched in the Autumn. Already they have sold more than 8,000 pairs.

For Walters, working in China, is an exciting opportunity as well as a social study: “This is a fascinating place to be right now while it’s experiencing growth. Watching increasing wealth and change, to witness the impact on people is very interesting. “The government is actually currently doing a fantastic job in creating the infrastructure needed to allow industry to grow, to bring business here.”

What about the future? Walters tells newstatesman.com that he’s not sure what the future holds, whether there will be other avenues for his business or other ideas, it is too soon to say.

As part of the process of change some of the revenue of OSPOP goes into an education fund for students at the high school near the factory. “Last week we had a ceremony where I met the 10 new recipients of the education programme that we have going. They will get help from us to go to University.”

It is apparent that he sees his business model as not only making profits but also helping people, as part of the process of change. In an area where the workforce is made up of predominantly miners and farmers, this is much welcomed help.

Maybe he represents a new breed of entrepreneur who sees not just profit margins but finds a way to help a local community.

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.