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Forum Post: The Next American Revolution Has Already Begun: An Interview With Gar Alperovitz

Posted 1 year ago on June 8, 2013, 3:55 p.m. EST by LeoYo (5878)
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The Next American Revolution Has Already Begun: An Interview With Gar Alperovitz

Saturday, 08 June 2013 10:08 By Gar Smith, The Berkeley Daily Planet | Interview

http://truth-out.org/opinion/item/16847-the-next-american-revolution-has-already-begun-gar-smith-interviews-gar-alperovitz

Gar S: You argue that “evolutionary reconstruction” does not flow from reform or revolution but rather “from building institutions, workplaces and cultures concerned with democratizing wealth.” How significant are cooperative enterprises in today's economy. Could you describe the current state of America's cooperative economy?

Gar A: Given that the economy is unlikely to truly collapse and provoke explosive change—for all the reasons I have indicated—and given that a “reform” solution like the New Deal is extremely difficult in the absence of a strong institutional power base for liberalism (e.g. labor unions), we face an extremely unusual political situation. I believe we are entering an extended period, a multi-decade period, in which the dominant reality is likely to be one of erratic growth, stagnation, periodic inflation, substantial political stalemate and decay.

In such a context, the prospects for near-term change are obviously not great—especially when such change is conceived in traditional terms. On the other hand, for precisely such reasons, there is likely to be an intensified process of much deeper probing, much more serious political analysis, and much more fundamental institutional exploration and development. In fact, this is already well underway. Beneath the surface level of politics-as-usual, continuing political stalemate and the exhaustion of existing approaches have begun to open up some very interesting strategic possibilities. These are best understood as neither “reforms” (policies to modify and control, but not transcend, current corporate-dominated institutions) nor “revolution” (the overthrowing of current institutions), but rather a longer-term process of “evolutionary reconstruction”—that is, institutional transformation that unfolds over time.

Like reform, evolutionary reconstruction involves step-by-step nonviolent change. But like revolution, evolutionary reconstruction changes the basic institutions of ownership of the economy, so that the broad public (rather than “the one percent”) increasingly comes to own more and more of the nation’s productive assets. As the old system decays, an evolutionary reconstruction would see the foundations of a new system gradually rising and replacing failing elements of the old.

Though the press doesn’t much cover this, such processes are already observable in many parts of the current American system. Some numbers: There are now ten thousand worker-owned companies of one kind or another in the country. And they are expanding over time, and they’re becoming more democratic rather than less. There are 130 million people who are members of one or another form of cooperative. A quarter of American electricity is produced by either municipal ownership or cooperatives. Twenty-five percent of American electricity is, in other words, “socialized.” There are neighborhood corporations, land trusts, and other municipal and state strategies. One can observe such a dynamic developing in the central neighborhoods of some of the nation’s larger cities, places that have consistently suffered high levels of unemployment and poverty. In such neighborhoods, democratizing development has gone forward, paradoxically, precisely because traditional policies have been politically impossible.

All this has been building in scale and sophistication to the point that growing numbers of people now talk about a “New Economy.” It doesn’t yet compare to the giants of Wall Street and the corporate economy, of course. But it is growing to the point where challenges are also becoming possible. Move Your Money campaigns have seen billions transferred out of Wall Street banks into credit unions and local and community banks. If you add up the credit unions they are the equivalent of one of the largest US banks, knocking Goldman Sachs out of the top five.

I see this era as something akin to the decades before the New Deal, the time when experimentation and development in the state and local “laboratories of democracy” laid down the principles and programs that became the basis for much larger national policies when the right political moment occurred.

Gar S: You clearly show that regulating Wall Street doesn’t work and breaking up large banks is unlikely to last. The conservative Chicago School of Economics, you point out, had a solution: essentially any business “too big to regulate”” should be nationalized. “Take them over; turn them into public utilities.” Could large banks really be taken over and transformed?

Gar A: The old conservative economists were right: Regulation doesn’t work; they capture the regulators. Anti-trust doesn’t work; if you break them up, they re-group. Look at Standard Oil. Look at AT&T and the telephone companies. In fact, the major banks are even bigger now than they were in 2008 when they were deemed “too big to fail.” They imperil the entire economy. So ultimately the only answer, logically, is to take them over at some point. Milton Friedman’s revered teacher, H.C. Simons, the founder of the conservative Chicago School of economics, was one of the first to point out this logic. He argued that this was necessary because it was the only way to preserve a genuinely free economy. Can it be done? We just did it in one form: In response to the financial crisis the federal government essentially nationalized General Motors and A.I.G. and was in a position to do the same with Chrysler and several major banks because of the huge injections of public capital that were required to save them from bankruptcy. At one point, Obama frankly told the bankers that he was the only one standing between them and the pitchforks. What happens when the next financial crisis occurs (as most observers on left, right and center think inevitable)? Or the one after that?

There are also already alternative models at hand. Most people don't realize this, but the federal government currently runs 140 different government banks. They aren’t always called banks, although sometimes they are, like the Export-Import Bank and the National Cooperative Bank. But sometimes they take the form of small business loans programs or agricultural programs. Then there is the Bank of North Dakota, a public bank that has been there for ninety years. It's a state-owned bank, very popular with small business but also labor. Twenty states have introduced legislation to create public banks of their own. States have huge tax flows, which could capitalize such banks. Once you start to look more carefully, beneath the surface of media attention, it may be that far more is possible much earlier and much faster than many now imagine.

Gar S: If you don’t like corporate capitalism or state socialism, what’s left? Shouldn’t a fundamental goal be to prevent accumulations of great wealth. Once great wealth or power is attained, there is a tendency to fear the majority and seek to protect one’s fortune at all costs.

Gar A: That is a fair question, and most people don’t face it squarely: “If you don’t like corporate capitalism, where the corporations dominate the political system, and you don’t like state socialism, where the state dominates the system by virtue of its ownership, what do you want?” I think the developments reported on in the book point towards something very American, something that might be called “a community sustaining system”—one in which national structures and regional structures and local structures are all oriented to producing healthy local community economies, and thereby healthy and ecologically sustainable democratic communities.

We are at a very remarkable moment in American history: Even as we face massive economic, social and environmental challenges, more and more people are beginning to see that politics as usual doesn’t work, that the problems are fundamental to the system itself. These issues are on the table for the first time in many decades. So there needs to be an answer at some point, in terms of system design, to the question of what a system looks like that isn’t corporate capitalism and isn’t state socialism but begins with community and how we build it.

The truly central question is who gets to own the nation’s wealth? Because it’s not only an economic question, it determines politics in large part. The corporate capitalist system lodges such power in the corporations and tiny elites. An alternative system must begin at the bottom and democratize ownership from the bottom up—all the way from small co-ops and neighborhood corporations on up through city and state institutions and even, when necessary, regionally and nationally.

I think we can see the outlines of such a model already emerging in developments in the New Economy. It might be called a “Pluralist Commonwealth.” Plural forms of common wealth ownership. Worker ownership, co-ops, municipal utilities, neighborhood land trusts, state ownership of certain national firms. Plural forms. It’s not very sexy language, but it attempts to get to the idea that you must change ownership of wealth in many different ways in order to achieve democratic results and achieve cultural changes that allow us a democratic solution to the systemic problem. The key thing is that just below the surface of media attention a great deal is going on—many, many new developments that move in the direction of democratic ownership, starting at the very grass roots level, and moving up.

All of this ultimately also puts “the system question” on the table. We need a serious and wide-ranging debate around a broader menu of institutional possibilities for America’s future than the stale choices commonly discussed on both left and right.

This piece was reprinted by Truthout with permission or license.

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[-] 3 points by LeoYo (5878) 1 year ago

US Inequality Now Literally Off the Chart

Saturday, 08 June 2013 10:48 By Salvatore Babones, Inequality.org | News Analysis

http://truth-out.org/news/item/16849-us-inequality-now-literally-off-the-chart

Among the world’s major nations, documents the UN agency dedicated to labor matters, only one currently has a level of inequality both high and rising.

It is well known that the level of income inequality stretches much higher in the United States than in the other developed countries of Europe and North America. Now a report from the International Labour Organization shows that U.S. inequality has literally gone off the chart.

Income inequality in the United States is soaring so high, in fact, that the authors of the ILO’s new 2013 World of Work report couldn’t even place the United States on the same graph with the other 25 developed countries their new study examines.

Income inequality reflects the sum total of all the differences between the incomes enjoyed by different households in a country. Differences between rich and poor households, rich and middle-income households, middle-income and poor households all enter into total income inequality.

Researchers usually measure income inequality using a statistic called the Gini coefficient. The Gini coefficient runs from a minimum of 0 (perfect equality in incomes across all households) to 100 (one rich household gets all the income for an entire country).

The ILO report places the US Gini coefficient at 47.7, or almost half way toward the extreme where one rich household gets everything and everyone else gets nothing.

By comparison, the levels of inequality in the other 25 developed countries studied all fall in a band between 20 and 35.

Even worse, in America inequality is not only high but rising. The Unites States is one of only three developed countries where income inequality rose during the recession of 2008-2009, then continued rising through the lackluster recovery of 2010-2011.

The other two: Denmark and France. Both these countries had much lower levels of inequality to start with. By 2011, Denmark’s inequality had risen into the high 20s and France’s inequality into the low 30s. In the United States inequality sat at 46.3 before the recession, moved to 47.0 in 2010, and rose further to 47.7 in 2011.

Rising inequality has hit the American middle class particularly hard. But America’s middle class decline began well before the recession hit in 2008. Every year fewer and fewer Americans qualify as middle class, and those who do have lower and lower incomes.

The share of U.S. adults living in middle-income households, the new ILO report notes, dropped from 61 to 51 percent between 1970 and 2010, and the median incomes of these households fell 5 percent.

Where has the middle class held its own in recent decades? Well, in Denmark and France, among other countries. The country with the largest middle class according to the ILO’s calculations is Norway, where about 70 percent of the population rate as middle class. In the United States today only about 52 percent of the population can claim middle class status.

The World of Work report concludes that the middle class in the United States and around the world is suffering from “long-term unemployment, weakening job quality, and workers dropping out of the labour market altogether.” Things have been bad for a long time, but the recession has made them far worse.

The ILO, founded in 1946, now operates a specialist agency of the United Nations. The world’s employers and workers are equally represented on its governing board, alongside the representatives of 28 governments, including the United States government.

Different international organizations use different data sources for comparing inequality levels across countries. The ILO World of Work report uses raw data from the Census Bureau for the United States and from Eurostat for European countries.

All these sources agree that income inequality has widened more in the United States than in other developed countries. The ILO report finds a much larger difference than other organizations, such as the OECD. One reason for the difference: As a UN organization, the ILO is committed to using data from official sources like the U.S. Bureau of the Census and published, peer-reviewed scientific journal articles. Other organizations like the OECD and private think tanks make their own estimates of national inequality levels using data that may not be publicly available and methodologies that may not be transparent or audited.

According to the official data compiled by the ILO and documented in the World of Work report, only South Africa and about a dozen Latin American countries have higher levels of inequality than the United States.

In nearly all of these countries inequality appears to be either stable or falling. Out of a total of 57 countries studied by the ILO, 31 developing and 26 developed, only one — the United States — has a level of income inequality both high and rising.

This simple fact — that only one nation has inequality both “high and rising” — shows that high and rising inequality is not inevitable. The rich are not winning everywhere, just as the rich have not always won in the United States.

We can have sensible policies that reduce inequality and bolster the middle class. The ILO suggests that we prioritize employment growth over budget cuts, increase public investment to make up for a lack of private investment, and raise taxes on unearned income from financial transactions.

The folks at the ILO are smart enough to understand that the reasons our governments don’t give us good, pro-people policies are not technical or economic, but political and ideological.

“Against mounting evidence,” the ILO concludes, “a fundamental belief persists in some quarters that less regulation and limited government will boost business confidence, improve access to international financial markets, and increase investment, although these results have not been evident.”

The empirical evidence says that we can reduce inequality and bolster the middle class by putting people back to work. But that will take government action. And government action is the one thing we don’t seem to have.

This piece was reprinted by Truthout with permission or license.

[-] -3 points by revolutionman (-106) from Kentland, IN 10 months ago

We need to form a team of investigators to crack government conspiracies!