The “occupations” in Boston and around the country are a justified response to the outrages of our current political-economic system. This is a system that looks the other way as the top 1% runs off with almost a fifth of the nation’s income and more than a third of its total wealth. Wall Street and the banks are both appropriate targets for protest.
However, the deeper reality is that our economic system – corporate capitalism held (weakly) in check by labor – is fading before our eyes. It was labor’s political power that in large part gave liberalism the ability to enact modest reforms, including regulations to keep the bankers partially in line. Those reforms have decayed too: the elimination of Glass-Steagall in 1999 and the slow undermining of Dodd-Frank regulations are only the most glaring examples. Moreover, globalization continues to undermine traditional communities and labor’s political clout.
There may be no viable way forward. If there is, however, it is all but certain to be very different from the former economic model. One development that holds possibilities for a different future is the ongoing creation of community-based economic institutions.
One of the most advanced of these institutions is the major effort underway in Cleveland, which involves an integrated complex of worker-owned cooperative enterprises. These enterprises include a weatherization and solar installation co-op, an industrially scaled (and ecologically advanced) laundry, and a commercial greenhouse. The “Cleveland Model” seeks to secure the considerable purchasing power of large scale “anchor institutions,” such as hospitals and universities. In addition, the model includes a revolving fund, so that profits made by these businesses help in establishing new ventures as time goes on.
The new model has also become the basis for new national legislation soon to be introduced by Senator Sherrod Brown, which seeks to provide federal support to test this model in other cities. Already, exploratory efforts are under way in Atlanta; Pittsburgh, Washington D.C., and several other communities.
Experiments such as these have the power to change what is discussed in debates about the economy, particularly regarding who should own “the means of production.” In this way, community-based economic institutions challenge the dominant, hegemonic ideology in unorthodox and pragmatic ways – we might say, in very American ways. Efforts to develop these institutions, therefore, are examples of the historical creation of political knowledge. They introduce new ideas into common culture and shift what can be explored in political discourse.
They also suggest the outlines of a new power constellation that slowly displaces corporate influence. This approach may one day take its place alongside more traditional “countervailing power” strategies, which aim to regulate, tax, and ‘incentivize’ corporate power.
Worker co-ops are one practical alternative to today’s literally medieval patterns of ownership in which a mere 400 individuals have more income than the entire bottom 60 percent of society put together. However, co-ops are not the only way. Numerous other efforts also suggest ways to “democratize ownership,” or move ownership out of the corporate system and into community-serving institutions.
“Social enterprises” engaging in business to support specific community missions now make up what is sometimes called a “fourth sector” of the economy. There are roughly 4,500 not-for-profit community development corporations in operation. More than 11,000 businesses are owned in whole or part by their employees, and six million more individuals are involved in these enterprises than are members of private-sector unions. Another 130 million Americans are members of various urban, agricultural, and credit union cooperatives. In many cities, important new “land trust” developments are underway using an institutional form of nonprofit or municipal ownership that develops and maintains low- and moderate-income housing.
At this stage, the central strategic questions are how to refine and expand these various models and how to legitimate the idea of democratized ownership. Ultimately such strategies must converge with (and provide new content for) political mobilizations. Movement-building and electoral efforts need to take us beyond liberal and populist categories of change to include larger economic institutions. A far reaching transformation of this kind might one day be achieved if activists build on current developments to create even more advanced democratizing models and if constituencies come to understand why these new economic models are important to a democratic future.
Gar Alperovitz is the author of America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty and Our Democracy. He is Co-Founder of the Democracy Collaborative and Lionel R. Bauman Professor of Political Economy at the University of Maryland.