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Gar Alperovitz on the Evolutionary Reconstruction strategy for social change

Article by Michel Bauwens.

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In Dissent magazine, Gar Alperovitz proposes and describes a political/policy strategy for radical change, which is based neither reform within the system (reformism), nor replacement of the system (revolution), but transformation within the system through the use of innovative institutional frameworks.

Below, we excerpt the part of the essay explaining the strategy, with two examples.

Gar Alperovitz:

“For over a century, liberals and radicals have seen the possibility of change in capitalist systems from one of two perspectives: the reform tradition assumes that corporate institutions remain central to the system but believes that regulatory policies can contain, modify, and control corporations and their political allies. The revolutionary tradition assumes that change can come about only if corporate institutions are eliminated or transcended during an acute crisis, usually but not always by violence.

But what happens if a system neither reforms nor collapses in crisis?

Quietly, a different kind of progressive change is emerging, one that involves a transformation in institutional structures and power, a process one could call “evolutionary reconstruction”.

Traditional liberalism, dependent on expensive federal policies and strong labor unions, is moribund. The government no longer has much capacity to use progressive taxation to achieve the goal of equity or to regulate corporations effectively. Congressional deadlocks on such matters are the rule, not the exception. At the same time, ongoing economic stagnation or mild upturns followed by further decay, and “real” unemployment rates in the 15 percent to 16 percent range appear more likely than a return to booming economic times.

IRONICALLY, THIS grim new order may open the way for the kinds of “evolutionary reconstructive” institutional change described here. Since the Great Depression, liberal activists and policy makers have implicitly assumed they were providing one or another form of “countervailing power” against large corporations. But institutional reconstruction aims either to weaken or displace corporate power. Strategies like anti-trust or efforts to “break up” big banks aim to weaken. Public banking, municipal utilities, and single-payer health plans attempt to displace privately owned companies. At the same time, community-based enterprises offer public officials alternatives to paying large tax-incentive bribes to big corporations.

Of course, “evolutionary reconstruction” might fail, as have most kinds of top-down national reform. The era of stalemate and decay might continue and worsen. Like ancient Rome, the United States could simply decline and fall, unable to address its social ills.

However, even during a sustained era of stalemate and decay, it may be possible to develop a coherent long-term progressive strategic direction. Such a direction would build upon the remaining energies of traditional liberal reform, animated over time by new populist anger and movements aimed at confronting corporate power, the extreme concentration of income, failing public services, the ecological crisis, and military adventurism. And it would explicitly advocate the construction of new institutions run by people committed to developing an expansively democratic polity, thereby giving political voice to the new constituencies emerging alongside the new developments at the same time it helps to begin altering underlying institutional power balances.

In connection with environmental issues, at least, some “capitalists” also seem willing to sign onto this vision. New organizations like the Business Alliance for Local Living Economies (BALLE) and the American Sustainable Business Council (ASBC) have been quietly developing momentum in recent years. BALLE, which has more than 22,000 small business members, works to promote sustainable local community development. ASBC (which includes BALLE as a member) is an advocacy and lobbying effort that involves more than 150,000 business professionals and 30 separate business organizations committed to sustainability. Leading White House figures and such Cabinet-level officials as Labor Secretary Hilda Solis have welcomed the organization as a counter to the national Chamber of Commerce. (Jeffrey Hollender, chair of ASBC’s Business Leadership Council and former CEO of Seventh Generation, has denounced the Chamber for “fighting democracy and destroying America’s economic future” because of its opposition to climate change legislation and its support for the Citizens United decision.) Gus Speth, a member of ASBC’s Advisory Board (and former environmental adviser to Presidents Carter and Clinton) offers a more far-reaching general perspective: “For the most part, we have worked within this current system of political economy, but working within the system will not succeed in the end when what is needed is transformative change in the system itself.”

AT THE heart of the spectrum of emerging institutional change is the traditional radical principle that the ownership of capital should be subject to democratic control. In a nation where 1 percent of the population owns nearly as much wealth as the entire bottom half of the nation, this principle may be particularly appealing to the young—the people who will shape the next political era. In 2009, even as Republicans assailed President Obama and his liberal allies as immoral “socialists,” a Rasmussen poll reported that Americans under thirty were “essentially evenly divided” as to whether they preferred “capitalism” or “socialism.” Even if many were unsure about what “socialism” is, they were clearly open to something new, whatever it might be called. A non-statist, community-building, institution-changing, democratizing strategy might well capture their imagination and channel their desire to heal the world. It is surely a positive direction to pursue. Just possibly, it could open the way to an era of true progressive renewal, even one day perhaps step-by-step systemic change or the kind of unexpected, explosive, movement-building power evidenced in the “Arab Spring” and, historically, in our own civil rights, feminist, and other great movements.”

* Example 1: Community-Owned Projects

“One can also observe a developing institutional dynamic in the central neighborhoods of some of the nation’s larger cities, places that have consistently suffered high levels of unemployment and underemployment, with poverty commonly above 25 percent. In such neighborhoods, democratizing development has also gone forward, again paradoxically, precisely because traditional policies—in this case involving large expenditures for jobs, housing and other necessities—have been politically impossible. “Social enterprises” that undertake businesses in order to support specific social missions now increasingly make up what is sometimes called “a fourth sector” (different from the government, business, and nonprofit sectors). Roughly 4,500 not-for-profit community development corporations are largely devoted to housing development. There are now also more than eleven thousand businesses owned in whole or part by their employees; five 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.

The various institutional efforts have also begun to develop innovative strategies that suggest broader possibilities for change. Consider the Evergreen Cooperatives in Cleveland, Ohio, an integrated group of worker-owned companies, supported in part by the purchasing power of large hospitals and universities. The cooperatives include a solar installation company, an industrial scale (and ecologically advanced) laundry, and soon a greenhouse capable of producing more than five million heads of lettuce a year. The Cleveland effort, which is partly modeled on the nearly 100,000 person Mondragón cooperatives in the Basque region of Spain, is on track to create new businesses, year by year, as time goes on. However, its goal is not simply worker ownership, but the democratization of wealth and community-building in general in the low-income Greater University Circle area of what was once a thriving industrial city. Linked by a nonprofit corporation and a revolving fund, the companies cannot be sold outside the network; they also return 10 percent of profits to help develop additional worker-owned firms in the area. (Full disclosure: The Democracy Collaborative, which I co-founded, has played an important role in helping develop the Cleveland effort. See http://www.Community-Wealth.org for further information on this and many other local and state efforts.)

Another innovative enterprise is Market Creek Plaza in San Diego. There a comprehensive, community-owned project links individual and collective wealth-building through a $23.5-million commercial and cultural complex anchored by a shopping center. The complex has developed a range of social and economic projects that have resulted in the employment of more than 1,700 people. Its multicultural emphasis on the arts has helped create several venues for common activity among the local Asian, Hispanic, and black communities.

Significantly, these collectively owned businesses are commonly supported by unusual local alliances, including not only progressives; labor unions; and nonprofit and religious leaders; but also, in many cases, the backing of local businesses and bankers. The efforts have also attracted surprising political support. In Indiana, for example, Republican State Treasurer Richard Mourdock has established a state linked deposit program to provide state financing support for employee ownership. At this writing, Ohio Democratic Senator Sherrod Brown has plans to introduce model legislation to support the development of an initial group of Evergreen-style efforts in diverse parts of the country. Environmental concerns are also involved; many of the enterprises are “green” by design, increasingly so as time goes on. Cleveland’s Evergreen laundry, which uses less than a third the amount of water used by comparable commercial firms, is one of the most ecologically advanced in the Midwest. In Washington state, Coastal Community Action (CCA) operates a portfolio of housing, food, health, and employment programs for low-income residents that uses development and ownership of a fourteen million dollar wind turbine to generate income to support its social service programs.”

* Example 2: Innovative uses of public land ownership

“Yet another sphere of institutional growth centers on land development. By maintaining direct ownership of areas surrounding transit station exits, public agencies in Washington, D.C., Atlanta, and other cities earn millions capturing the increased land values their transit investments create. The town of Riverview, Michigan, has been a national leader in trapping methane from its landfills and using it to fuel electricity generation, thereby providing both revenues and jobs. There are roughly five hundred similar projects nationwide. Many cities have established municipally owned hotels. There are also over two thousand publicly owned utilities that provide power (and, increasingly, broadband services) to more than forty-five million Americans, in the process generating $50 billion in annual revenue. Significant public institutions are also common at the state level. CalPERS, California’s public pension authority, helps finance local community development needs; in Alaska, state oil revenues provide each citizen with dividends from public investment strategies as a matter of right; in Alabama, public pension investing has long focused on state economic development (including employee-owned firms).”

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