There’s economic reform, and then there’s economic
transformation. How entrepreneurs, activists, and theorists are laying
the groundwork for a very different economy.
posted May 23, 2012
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As our political
system sputters, a wave of innovative thinking and bold experimentation
is quietly sweeping away outmoded economic models. In 'New Economic
Visions', a special five-part
AlterNet
series edited by economics editor Lynn Parramore in partnership with
political economist Gar Alperovitz of the Democracy Collaborative,
creative thinkers come together to explore the exciting ideas and
projects that are shaping the philosophical and political vision of the
movement that could take our economy back.
Just
beneath the surface of traditional media attention, something vital has
been gathering force and is about to explode into public consciousness.
The “
New Economy Movement” is a far-ranging coming together of
organizations, projects, activists, theorists and ordinary citizens
committed to rebuilding the American political-economic system from the
ground up.
The broad goal is
democratized ownership of the economy for the “99 percent” in an
ecologically sustainable and participatory community-building fashion.
The name of the game is practical work in the here and now—and a
hands-on process that is also informed by big picture theory and
in-depth knowledge.
Thousands of
real world projects—from solar-powered businesses to
worker-owned
cooperatives and
state-owned banks—are underway across the country.
Many are self-consciously understood as attempts to develop working
prototypes in state and local “laboratories of democracy” that may be
applied at regional and national scale when the right political moment
occurs.
The movement includes
young and old, “Occupy” people,
student activists, and what one older
participant describes as thousands of “people in their 60s from the
'60s” rolling up their sleeves to apply some of the lessons of an
earlier movement.
Explosion of Energy
A
powerful trend of hands-on activity includes a range of economic models
that change both ownership and ecological outcomes. Co-ops, for
instance, are very much on target—especially those which emphasize
participation and green concerns.
The Evergreen Cooperatives in a
desperately poor, predominantly black neighborhood of Cleveland, Ohio
are a leading example. They include a worker-owned solar installation
and weatherization co-op; a state-of-the-art, industrial-scale
commercial laundry in a LEED-Gold certified building that uses—and
therefore has to heat—only around a third of the water of other
laundries; and a soon-to-open large scale hydroponic greenhouse capable
of producing three million head of lettuce and 300,000 pounds of herbs a
year. Hospitals and universities in the area have agreed to use the
co-ops’ services, and several cities—including Pittsburgh, Atlanta,
Washington, DC and Amarillo, Texas are now exploring similar efforts.
History
dramatizes the implacable power of the existing institutions—until,
somehow, that power gives way to the force of social movements.
Other
models fit into what author Marjorie Kelly calls the “generative
economy”—efforts that inherently nurture the community and respect the
natural environment. Organic Valley is a cooperative dairy producer in
based in Wisconsin with more than $700 million in revenue and nearly
1,700 farmer-owners. Upstream 21 Corporation is a “socially responsible”
holding company that purchases and expands sustainable small
businesses. Greyston Bakery is a Yonkers, New York “B-Corporation” (a
new type of corporation designed to benefit the public) that was
initially founded to provide jobs for neighborhood residents. Today,
Greystone generates around $6.5 million in annual sales.
Recently,
the United Steelworkers union broke modern labor movement tradition and
entered into a historic agreement with the Mondragón Cooperative
Corporation and the Ohio Employee Ownership Center to help build
worker-owned cooperatives in the United States along the lines of a new
“union-co-op” model.
The movement is also serious about
building on earlier models. More than 130 million Americans, in fact,
already belong to one or another form of cooperative—and especially the
most widely known form: the credit union. Similarly, there are some
2,000 municipally owned utilities, a number of which are ecological
leaders. (Twenty-five percent of American electricity is provided by
co-ops and public utilities.) Upwards of 10 million Americans now also
work at some 11,000 employee-owned firms (ESOP companies).
More
than 200 communities also operate or are establishing community land
trusts that take land and housing out of the market and preserve it for
the community. And hundreds of “social enterprises” use profits for
social or community serving goals. Beyond these efforts, roughly 4,500
Community Development Corporations and 1.5 million non-profit
organizations currently operate in every state in the nation.
The
movement is also represented by the “Move Your Money” and “bank
transfer day” campaigns, widespread efforts to
shift millions of dollars
from corporate giants like
Bank of America to one or another form of
democratic or community-benefiting institution. Related to this are
other “new banking” strategies. Since 2010, 17 states, for instance,
have considered legislation to set up public banks along the lines of
the long-standing Bank of North Dakota.
Several
cities—including Los Angeles and Kansas City— have passed “responsible
banking” ordinances that require banks to reveal their impact on the
community and/or require city officials to only do business with banks
that are responsive to community needs. Other cities, like San Jose and
Portland, are developing efforts to move their money out of Wall Street
banks and into other commercial banks, community banks or credit unions.
Politicians and activists in San Francisco have taken this a step
further and proposed the creation of a publicly owned municipal bank.
There
are also a number of innovative non-public, non-co-op banks—including
the New Resource Bank in San Francisco, founded in 2006 “with a vision
of bringing new resources to sustainable businesses and ultimately
creating more sustainable communities.” Similarly, One PacificCoast
Bank, an Oakland-based certified community development financial
institution, grew out of the desire to “create a sustainable, meaningful
community development bank and a supporting nonprofit organization.”
And One United Bank—the largest black-owned bank in the country with
offices in Los Angeles, Boston and Miami—has financed more than $1
billion in loans, most in low-income neighborhoods.
Ex-JP
Morgan managing director John Fullerton has added legitimacy and force
to the debate about new directions in finance at the ecologically
oriented Capital Institute. And in several parts of the country,
alternative currencies have long been used to help local community
building—notably “BerkShares” in Great Barrington, Massachusetts, and
“Ithaca Hours” in Ithaca, New York.
Can There Be “Good” Corporations?
When companies are owned by workers and the community, everything changes.
Active
protest efforts are also underway. The
Occupy movement, along with many
others, has increasingly used direct action in support of new banking
directions—and in clear opposition to old. On April 24, 2012 over 1,000
people protested bank practices at the Wells Fargo shareholder meeting
in San Francisco. Similar actions, some involving physical “occupations”
of bank branches, have been occurring in many parts of the country
since the Occupy movement started in 2011. Large-scale demonstrations
occurred at the Bank of America’s annual shareholder meeting in May
2012.
What to do about large-scale
enterprise in a “new economy” is also on the agenda. A number of
advocates, like Boston College professor Charles Derber, contemplate
putting worker, consumer, environmental, or community representatives of
“stakeholder” groups on corporate boards. Others point to the Alaska
Permanent Fund which invests a significant portion of the state’s
mineral revenues and returns dividends to citizens as a matter of right.
Still others, like David Schweickart and Richard Wolff, propose
system-wide change that emphasizes one or another form of worker
ownership and management. (In the Schweickart version, smaller firms
would be essentially directly managed by workers; large-scale national
firms would be nationalized but also managed by workers.) A broad and
fast-growing group seeks to end “corporate personhood,” and still others
urge a reinvigoration of anti-trust efforts to reduce corporate power.
(Breaking up banks deemed too big to fail is one element of this.)
In
March 2012, the Left Forum held in New York also heard many calls for a
return to nationalization. And even among “Small is Beautiful”
followers of the late E. F. Schumacher, a number recall this historic
build-from-the-bottom-up advocate’s argument that “[w]hen we come to
large-scale enterprises, the idea of private ownership becomes an
absurdity.” (Schumacher continuously searched for national models that
were as supportive of community values as local forms.)
Theory and Action
A
range of new theorists have also increasingly given intellectual muscle
to the movement. Some, like Richard Heinberg, stress the radical
implications of ending economic growth. Former presidential adviser
James Gustav Speth calls for restructuring the entire system as the only
way to deal with ecological problems in general and growth in
particular.
David Korten has offered an agenda for a new economy which
stresses small
Main Street business and building from the bottom up.
(Korten also co-chairs a “New Economy Working Group” with
John Cavanagh
at the Institute of Policy Studies.)
Juliet Schor has proposed a vision
of “Plentitude” oriented in significant part around medium-scale, high
tech industry. My own work on a Pluralist Commonwealth emphasizes a
community-building system characterized by a mix of democratized forms
of ownership ranging from small co-ops all the way up to
public/worker-owned firms where large scale cannot be avoided.
The movement obviously confronts the
enormous entrenched power of an American political economic system
dominated by very large banking and corporate interests.
Writers
like Herman Daly and David Bollier have also helped establish
theoretical foundations for fundamental challenges to endless economic
growth, on the one hand, and the need to transcend privatized economics
in favor of
a “commons” understanding, on the other. The awarding in
2009 of
the Nobel Prize to Elinor Ostrom for work on commons-based
development underlined recognition at still another level of some of the
critical themes of the movement.
Around
the country, thinkers are clamoring to meet and discuss new ideas. The
New Economy Institute, led primarily by ecologists and ecological
economists, hoped to attract a few hundred participants to a gathering
to be held at Bard College in June 2012. The event sold out almost two
months in advance! An apologetic email went out turning away hundreds
who could not be accommodated with the promise of much bigger venue the
next year.
And that’s just one
example. From April to May 2012, the Social Venture Network held its
annual gathering in Stevenson, Washington. The Public Banking Institute
gathered in Philadelphia. The National Center for Employee Ownership met
in Minneapolis—also to record-breaking attendance. And the Business
Alliance for Local Living Economies (BALLE) held a major conference in
Grand Rapids, Michigan. Other events planned for 2012 include the
Consumer Cooperative Management Association’s meeting in Philadelphia;
the U.S. Federation of Worker Cooperatives’ gathering in Boston; a
Farmer Cooperatives conference organized by the University of Wisconsin
Center for Cooperatives; and meetings of the National Community Land
Trust Network and the Bioneers. The American Sustainable Business
Council, a network of 100,000 businesses and 300,000 individuals, has
been holding ongoing events and activities throughout 2012.
Daunting Challenges
The
New Economy Movement is already energetically involved in an
extraordinary range of activities, but it faces large-scale, daunting
challenges. The first of these derives from the task it has set for
itself—nothing less than changing and democratizing the very essence of
the American economic system’s institutional structure.
Even
viewed as a long-range goal, the movement obviously confronts the
enormous entrenched power of an American political economic system
dominated by very large banking and corporate interests—and bolstered by
a politics heavily dependent on the
financial muscle of elites at the
top. (One recent calculation is that 400 individuals at the top now own more wealth than the bottom 160 million.)
A
second fundamental challenge derives from the increasingly widespread
new economy judgment that economic growth must ultimately be reduced,
indeed, even possibly ended if the dangers presented by climate change
are to be avoided—and if resource and other environmental limits are to
be responsibly dealt with.
Complicating
all this is the fact that most labor unions—the core institution of the
traditional progressive alliance—are committed to growth as absolutely
essential (as the economy is now organized) to maintaining jobs.
History
dramatizes the implacable power of the existing institutions—until,
somehow, that power gives way to the force of social movements. Most of
those in the New Economy movement understand the challenge as both
immediate and long-term: how to put an end to the most egregious social
and economically destructive practices in the near term; how to lay
foundations for a possible transformation in the longer term.
And
driving the movement’s steady build-up, day by day, year by year, is
the growing economic and social pain millions of Americans now
experience in their own lives—and a sense that something fundamental is
wrong. The New Economy Movement speaks to this reality, and just
possibly, despite all the obstacles—as with the civil rights, feminist,
environmental and so many other earlier historic movements—it, too, will
overcome. If so, the integrity of its goals and the practicality of its
developmental work may allow it to help establish foundations for the
next great progressive era of American history. It is already adding
positive vision and practical change to everyday life.
Gar Alperovitz is the Lionel
R. Bauman Professor of Political-Economy at the University of Maryland
and co-founder of the Democracy Collaborative. He is author, most
recently, of
America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty and Our Democracy and, with Lew Daly, of
Unjust Deserts: How the Rich Are Taking Our Common Inheritance. He is working on a new book on systemic institutional change.
This article was cross-posted from
AlterNet.
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