Suzanne Berger’s analysis of the ill effects of finance on manufacturing is illuminating but not surprising. The effects are equally dire in health care, infrastructure, and housing. The question is how can we reform the financial industry so that it better serves the public interest? On this score Berger seems pessimistic. “Today,” she writes, “California teachers need to protect their pensions by dismantling Ohio manufacturers. The structures of U.S. capital markets and fiscal policy reward investors whose decisions are based on maximizing returns over the short-term.” While the last sentence is certainly true, I question whether the problem is out of reach and disagree that California teachers need to dismantle Ohio manufacturers.

A few years ago, I helped the presidents of the United Federation of Teachers and the National Health Care Workers’ Union lobby the New York City Comptroller, who manages $127 billion of city workers’ pensions, to invest in energy-efficient retrofitting of public schools. Neither labor leader stood to gain directly from the investment, yet both supported it because it would create good jobs and improve the communities where their members work and live. I suspect that California teachers, if they were informed and had a voice in their pension investment decisions, would be similarly concerned about manufacturing in Ohio.

Unfortunately union leaders tend to be poorly informed and exercise little control over their pension investments. This is due in part to federal laws that mandate a “prudent man” standard for pension management. The courts and the SEC have interpreted this standard to mean that prudent men should care only about short-term profit maximization. Yet there is nothing stopping unions and the public from demanding that prudent investment aim at something other than short-term profits. So why don’t they? Why don’t workers use politics to restructure the financial industry when it is hurting them in so many ways?

We need to take shareholder organizing to a new level.

One answer is that the labor movement, much like the general public, has embraced free-market skepticism about active management of the economy. The idea that government, workers’ representatives, and industry should all play a role in planning education, training, and investment has long been derided as anti-democratic. The irony is that no other sector, except perhaps the defense industry, is as planned or deeply entrenched in government as finance. Since the demise of the gold standard in the early 1970s, the Treasury Department and leading banks have worked in concert on rules for international and domestic trade and investment. They have crafted procedures for managing crises. We saw the results in 2008, with rapidly coordinated international monetary moves as well as public and secret bailouts of financial firms. Of course, such planning has served not the public interest but the interests of an increasingly powerful elite. These mutual efforts have been so successful for big banks that the financial industry now wields enormous influence over Congress through campaign contributions and lobbyists, endangering democracy itself.

I do not think, though, that this means the situation is beyond repair. It means that participatory economic planning is precisely what is needed to strengthen democracy and improve our economy. But with Congress captured by special interests, we need strategies for reform that do not depend on progressive legislation, at least in the short term.

The lesson is that we need to democratize financial firms themselves. Why should workers allow publicly owned banks and investment firms to decide what to do with their savings without their participation? Are we to believe that workers are too ignorant to govern companies, yet they are wise enough to elect leaders who hold nuclear catastrophe at their fingertips? Of course this raises big questions: how to educate the public to make informed decisions related to firm governance; how to monitor firms on issues beyond profits; what role colleges and universities should play in democratizing economic planning; how to get such a movement started. But if we want to do something about the problems Berger so clearly identifies, we cannot be content with small ideas. I believe that if progressive movements can overturn segregation and voter suppression in the South, elect Barack Obama twice, and make Elizabeth Warren a senator and Bill de Blasio mayor of New York, then we can figure out how to take shareholder organizing to a whole different level on Wall Street.