Building the New Economy

bookWhat Then Must We Do? Straight Talk about the Next American Revolution
by Gar Alperovitz
Chelsea Green Publishing, 2013

Today in America we are entrenched in a crucible of economic crisis. Economic disparity has created a clear and distinct line between the so-called “99 percent” and the “1 percent,” a situation in which unfathomable amounts of wealth are controlled by mere hundreds of individuals, leaving the hundreds of millions below them with little or no economic and political power.

Now more than ever, we must find ways to oppose what is referred to as “neoliberalism,” an economic state form-ideology that seeks to subsume all human relation into the capitalist market place, making profit and growth the imperative achieved through the exploitation of those who own nothing but their labor.

Gar Alperovitz in his clarion call What Then Must We Do? helps explain how we came to find ourselves in this dire situation and offers a strategy for how to get out it. Between the years of 1945-1970, he writes, we experienced “the most powerful economic boom in modern history.” Our economy grew at a steady rate of 3.05 percent per year, and median family income nearly doubled during that period. Alperovitz draws our attention to the fact that these conditions did not come out of the blue nor were they purely economic. Economists often have trouble historicizing economic trends, content to analyze purely economic factors when trying to analyze economic booms and busts. But Alperovitz insists that this period from ’45-’70 was very unusual by virtue of being preceded by not only the Great Depression, which allowed for the passing of legislation like the New Deal, but also the boom created by the United States’ position of being the primary beneficiary of the Marshall Plan and the lack of serious international competitors during the post-war period.

World War II was pivotal in building the mid-century economy through a militaristic American expansionism. When the soldiers returned home from the battlefield, they got the GI bill that allowed them to go college and put them in a position to buy their first homes (it should be noted that these were primarily white men). Also, women entered the work force to increase family wages and workers put in more hours, birthing the overworked two-income family. While these post-war conditions allowed for certain economic and political advances, they also created powerful institutions, chiefly multinational corporations. The corporatization of American civic and cultural life has created the conditions for the creation of a small elite class of wealthy individuals who have unprecedented institutional power. Given this growing economic inequality, what then must we do?

Evolutionary Reconstruction

In order to courageously confront neoliberal global capitalism, Alperovitz argues that we need to engage in a process he calls “evolutionary reconstruction.” The road that got us here was not comprised of revolutionary moments, specific tax reforms, incentives, or even particular pieces of legislation. Rather, the creation of certain institutions and cultures that fostered particular values and practices that had profound effects. Therefore, Alperovitz proposes the possibility of a “certain longer-term evolutionary institution-building and institution-shifting strategy—one not for the faint of heart or for the short-term, instant gratification folks among us.” Alperovitz calls us to a deliberate long-term strategy of created alternative institutions.

At the beginning of Alperovitz’s book we find a quip uttered by historian Lewis Namier, that we all tend to “remember the future.” Alperovitz explains that this is the phenomenon of “remembering forward that which we unconsciously take for granted.” We assume the world must be a certain way, that there is simply “a way things are.” Philosopher Slavoj Žižek ironically notes the current popularity of apocalyptic points to a deep American malaise. During the summer of 2013 alone, one can point to the fact that almost every blockbuster was about the possible end of the world, energized by the cult of the heroic masculine (e.g., Man of Steel, Pacific Rim, This is the End, The Wolverine, Olympus has Fallen, White House Down, The World’s End, World War Z, Oblivion, After Earth). And television shows (like the Walking Dead) that depict the end of the world mean that for popular audiences, the end of the world is easier to imagine than an actual end to capitalism, which indeed has us on a collision course with apocalypse. American culture’s obsession with vampires and zombies unveils the way that our collective psyche is dealing with nihilistic existence in our personal and professional lives. In other words, there is a deep sense that we are destroying the world and its end is immanent, but there is simply nothing we can do except brace for it; we cannot imagine fixing the problems. The impoverishment of the apocalyptic imagination cripples our collective activist efforts.

Likewise, Namier’s statement that we “remember the future” is resonant with Gilles Deleuze’s analysis from Cinema 2:

We see, and we more or less experience, a powerful organization of poverty and oppression. And we are precisely not without sensory-motor schemata for recognizing such things, for putting up with and approving of them and for behaving ourselves subsequently, taking into account our situation, our capabilities, and our taste. We have schemata for turning away when it is too unpleasant, for prompting resignation when it is terrible and for assimilating when it is too beautiful.

Now more than ever we need to disorient our perception in order to truly “see” the world that is around us and unlock potentials we never noticed. It is through realizing unrealized possibilities together in a movement for economic democracy that we can embody a new politics of hope.

Imagining a Cooperative New Life Together

The value of Alperovitz’s book is in how it provides a valuable third way that we haven’t paid sufficient attention to, even though it has, in some cases, been right in front of us. The problem is that liberals and progressives want to simply tax the rich to fund programs for the poor to help them become middle class, even lamenting the boogeyman of capitalism, while conservatives fight for the status quo that gives them privilege, as they fearfully howl about the threat of socialism. Alperovitz urges to think about institutional change that avoids the pitfalls of each position.

As a progressive, it was news to me that 130 million Americans (40 percent) are already engaged in some form of cooperative ownership. Co-ops and public/employee ownership is an example of the kind of institutional change Alperovitz wants to foster. Taxing the rich assumes that the rich will always be there, that institutions that generate the super rich—big corporations and banks, for example—are engrained to the point of permanence. Alperovitz tells us “virtually all the gains of the entire economic system have gone to a tiny, tiny group at the top for at least the last three decades.” This is the group of wealthy individuals that Occupy Wall Street identified as the 1 percent, and now in the shadow of the Occupy movement we must move beyond protest to take steps toward democratizing wealth through incremental changes in how businesses and governments are organized and implemented.

Ironically, Alperovitz returns to the original Chicago School’s proposal in the “Chicago Plan” that called for “outright public ownership of Federal Reserve banks, the nationalization of money creation, and the transformation of private banks into highly restricted savings-and-loan like institutions.” Alperovitz’s point is that regulation can’t work: big corporations and banks, even if slimmed down, quickly regain their strength and take us back to square one, through regulating the regulators, due to their lobbying and economic power. Rhetoric about “taxing the rich” and “breaking up big banks” is not enough; the only option is to work toward the creation of ever more and stronger public utilities.

This is a route many of us have yet to seriously consider and see working even in our own midst. For example, South Dakota, one of the most conservative states in the United States, has had a state-run bank for many years and it has contributed hundreds of millions of dollars to its economy. We can’t assume that what has worked in the past to reform the economy will work in the present. Legislation and regulation is not enough, and the alternative Alperovitz articulates having to do with steady “evolutionary” change leading toward the creation of public ownership and utilities may just be a solution both liberals and conservatives can agree on.

Rethinking the new economy will take a prophetic imagination. Alperovitz calls us to reimagine our life together. He invokes the Jewish theologian Martin Buber’s principle of community, quoting Buber writing “a society can be called structurally rich to the extent that it is built up of genuine societies.” Building genuine societies entails local community organizing to gather fellow ordinary citizens for social change. As we engage in local economy and politics, Buber challenges us not to instrumentalize others, but to treat them with compassion and dignity. We will not be able to achieve democracy as a nation until we learn how to practice democracy in our local communities.

The faith-rooted organizing of the Civil Rights movement demonstrated the possibility of building beloved community through the power of nonviolent protest politics. As the Trayvon Martin verdict unveils, racism remains alive in the United States. While I agree with Alperovitz’s call to democratize wealth, I think he needs a stronger race critique in his analysis and solution, as the current configuration of economy continues to benefit whites, while many people of color end up stuck in a permanent underclass. The dream for a democratization of wealth must privilege communities of color, who have been systematically excluded from the American dream since our country’s founding.

Fifty years after Dr. Martin Luther King Jr.’s “I Have a Dream Speech” was delivered at the Lincoln Memorial on August 28, 1963, we must advance the dream through developing “new economy” institutions. Faith-rooted organizing through protest politics generates a sense of progressive community and effects positive progressive policy changes, but too often, the economic system remains unchanged. Today it is vital that we build solidarity through democratizing wealth and building a community-sustaining economy from the ground up. Groundswells of ordinary citizens are catching this democratic dream and working together to achieve it.


5 thoughts on “Building the New Economy

  1. While I wholeheartedly agree with most of the points made by the author – there is a certain lack of reality present in the suthor’s premise thst by making alternstive institutions alone we can change our society.
    Do you think those elites are going to just give up the power they have worked so hsrd for? There will be struggle, jilings, perhaps even assasinations as our movement gains strength.
    Remember Fed Hampton, Martin Luther king, I can go on and on here. Remember Cointellpro as well.

  2. Well, creating alternative institutions, longer-term institution-building, institution-shifting strategy. Sounds good, except that it is not realistic because it cannot happen. As a political economist, I must emphasize the power-relations situation. Today, the oligarchs have the system blocked, gridlocked. They control it through all sorts of… institutions, lobbies, think tanks, etc. that work for them. Today, the situation is much worse than during the time Ike’s military industrial complex. You have the financial economy controlled by speculative institutions like hedge funds, private equity firms, etc. These institutions operate totally outside ethics. Profits is the only goal. The CNN News, for example, is all about which stocks went up, which down. People are shamelessly manipulated, indoctrinated into thinking that that is all that matters. That they must buy a lot of stuff that they don’t really need. There are two classes of people now, not only in the U.S., but also in the world: Those who can, those who cannot afford things. There enough people who can. So, the illusion that society is functioning is there. But it is an illusion. In reality on all fronts the situation is catastrophic: the planet and mankind are being destroyed. The mediocrity of TV, movies, is absolutely incredible, and it is getting worse. Sports and luxury goods industries are at the top of the money-making pyramid. Football and basketball coaches are the highest paid people in the US. Why? because they allow this exploitative system to go on…

  3. The error of SOUTH Dakota is the above narrative seems intentional, in order to continue the constant confusion of N & S Dakota. North Dakota has a state bank and a state Mill and Elevator (state-owned grain handling and processing) making money for the state since the 1920s, when farmers, organized as The Non-Partisan League, took over the state government, as Shown in a film called Northern Light, (or Lights). The farmers were socialist and much cursed by opponents. The State Bank works, almost as intended!

  4. It is all well and fine for people who have never worked in the economy to criticize capitalism’s faults without offering viable alternatives.

    There are many arguments in favor of democratizing the economy. I have only one against such. The last hundred years have shown that every time politically imposed fairness is imposed on an economy, the people were worse off, not better. The Tsars were tyrants, but under them, Russia was an exporter of grain. The communists could never feed their people.

    Fidel Castro came to power promising the equitable distribution of Cuba’s sugar wealth. Today, Cuba imports sugar.

    We saw socialist East Germany side-by-side with capitalist West Germany. Where were the people better off? Which system collapsed under its own weight as it was based on nothing but centralized force. Ditto for North and South Korea.

    Some say Israel is a socialist society. Israeli companies rank third (after the UK and Canada) in foreign companies traded on American securities exchanges.

    Go the You Tube and watch the confrontation between Phil Donohue and Milton Friedman. Then draw your conclusions.

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