Saturday, February 2, 2013

Five Possibilities for the Next Great Progressive Push

Published on Friday, February 1, 2013 by Common Dreams

Five Possibilities for the Next Great Progressive Push

by Gar Alperovitz and Steve Dubb

Obama’s second inaugural address opened some hope of a brighter progressive future, yet virtually all the critical economic and distributional issues were off the table—and the pain is likely to continue. Paradoxically, the failings of traditional politics—and the anger that is already building up—suggest strategic possibilities that focus on critical institutions, along with opportunities for the step by step “evolutionary reconstruction” of basic ownership of the economy at different levels.

1. People’s Banks

At the height of the financial crisis in early 2009, some kind of nationalization of the banks seemed possible. It was a moment, President Obama told banking CEOs, when his administration was “the only thing between you and the pitchforks.” When the next financial crisis occurs—as many experts think certain—a different resolution may well prove necessary. As Willem Buiter, the chief economist of Citigroup, argued: if the public underwrites the costs of bailouts, “banks should be in public ownership.”

The fact is America has had a large number of public banking institutions for some time, and more are likely. The federal government today operates 140 banks and quasi-banks that provide loans and loan guarantees for an extraordinary range of domestic and international economic activities. The Bank of North Dakota, a highly successful state-owned bank founded in 1919, returned $340 million in profits to the public purse between 1996 and 2008. Legislative proposals to establish banks patterned in whole or part on the North Dakota model have been already introduced in more than a dozen states in response to the growing economic pain.

2. State by State Moves to Universal Healthcare

Healthcare is projected to consume nearly 20% of GDP by 2019. It has long been clear that the only serious way to control costs is through some form of single-payer system.

A slow state-by-state build-up suggests that an evolutionary reconstruction of the healthcare system is already under way. In Vermont, Governor Peter Shumlin signed legislation in May 2011 creating “Green Mountain Care.” Universal coverage, dependent on a federal waiver, would begin in 2017 and possibly as early as 2014. In Connecticut, the legislature in 2011 authorized a “SustiNet” non-profit public health insurance program, which it aims to launch in 2014. In all, bills to create universal healthcare have been introduced in nearly 20 states.

3. Building Community Wealth

There are now more than 10,000 businesses owned in whole or part by their employees; nearly 3 million more individuals are owners of 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, “land trusts” are using an institutional form of nonprofit or municipal ownership that develops and maintains low- and moderate-income housing.

In Cleveland, Ohio, an integrated group of worker-owned companies has been developed, supported in part by the purchasing power of large hospitals and universities, and partly modeled on the 85,000-person Mondragón cooperative network, based in the Basque region of Spain. Linked by a community-serving non-profit corporation and a revolving fund, the companies return 10 percent of profits to finance additional firms. As traditional strategies falter, many other cities are now exploring efforts of this kind, including Atlanta; Pittsburgh; Amarillo, Texas; and Washington, DC.

4. Municipal Change

There is also municipal development. By maintaining ownership of areas surrounding transit station exits, public agencies in Washington, DC, Atlanta and elsewhere 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 generate electricity, thereby providing both revenue and jobs. There are roughly 500 similar projects nationwide. There are also nearly 2,000 publicly owned utilities that provide power (and often broadband) to more than 45 million Americans, generating $50 billion in annual revenue.

5: Democratizing the Corporation

To deal with economic and ecological challenges, we must also come to terms with corporate power dynamics. Public corporations are subject to Wall Street’s first commandment: "Grow or die!” You can’t just wish or regulate that idea away.

We nationalized GM, AIG and implicitly Chrysler in the last big crisis. What will happen in the next? If some of the most important corporations have a massively disruptive and costly impact on the economy and environment—and if they are likely to subvert regulation and anti-trust laws—a public takeover becomes the only logical answer. This general argument was put forward most forcefully not by liberals, but by the founders of the Chicago School of economics! Henry C. Simons, Milton Friedman’s mentor, was quite clear that the state “should face the necessity of actually taking over, owning, and managing directly…industries in which it is impossible to maintain effectively competitive conditions.”

The Pre-History of the Next Progressive Direction

The slow buildup of democratizing strategies could well be laying groundwork for the pre-history of the next big progressive push—the critical developmental work needed to clarify new principles for larger scale application. As in the decades before the New Deal, state and local experiments suggest new larger scale approaches.

For decades, to many the only longer term choices have seemed to be state socialism or corporate capitalism. But new approaches may also begin to pose new systemic ideas for a longer term progressive structural change that is both quite American in content, and quite radical in its vision of a system beyond the traditional models.

Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative. His forthcoming book, What Then Must We Do?: Straight Talk About the Next American Revolution, is now available for pre-ordering. Other recent books include America Beyond Capitalism and (with Lew Daly) Unjust Deserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back.

Steve Dubb is Research Director of the Democracy Collaborative.

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