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Thursday, June 14, 2012

The Rise of the New Economy Movement

The Rise of the New Economy Movement

There’s economic reform, and then there’s economic
transformation. How entrepreneurs, activists, and theorists
are laying the groundwork for a very different economy.

By Gar Alperovitz
Yes Magazine
June 14, 2012

Just beneath the surface of traditional media attention, something
vital has been gathering force and is about to explode into public

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

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

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

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.

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

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.

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,

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

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, Lionel R. Bauman Professor of Political Economy
at the University of Maryland, is a Founding Principal of The
Democracy Collaborative, as well as historian, political economist,
and writer.

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