America Beyond Capitalism: Is It Possible?

The following article is adapted from "America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty and Our Democracy," a new paperback edition of which will be published this month by The Democracy Collaborative and Dollars & Sense.

“Black Monday,” September 19, 1977, was the day 34 years ago when the shuttering of the Youngstown Sheet and Tube steel mill threw 5,000 steelworkers onto the streets of their decaying Midwestern hometown. No local, state or federal programs offered significant help. Steelworkers called training programs “funeral insurance”: they led nowhere since there were no other jobs available. Inspired by a young steelworker, an ecumenical religious coalition put forward a plan for community-worker ownership of the giant mill. The plan captured widespread media attention, the support of numerous Democrats and Republicans (including the conservative governor of the state at the time), and an initial $200 million in loan guarantees from the Carter administration.

Corporate and other political maneuvering in the end undercut the Youngstown initiative. Nonetheless, the effort had ongoing impact, especially in Ohio, where the idea of worker-ownership became widespread in significant part as the result of publicity and educational efforts traceable to the Youngstown effort—and because of the depth of policy failures and the continuing pain of deindustrialization throughout the state. In the more than three decades since that effott, numerous employee-owned companies—inspired directly and indirectly by the effort to save the Youngstown mill—have been developed in Ohio. Individual lives were also changed, among them that of the late John Logue, a professor at Kent State University who established the Ohio Employee Ownership Center, an organization that provides technical and other assistance to help firms across the state become worker-owned.

There has also been an evolution in the position of the United Steelworkers union. In the late 1970s the union saw worker-ownership as a threat to organizing, and it opposed efforts by local steelworkers to explore employee-owned institution-building in cities like Youngstown. Over the decades, however, the union changed its position as its leaders saw the need to supplement traditional forms of labor organizing with other strategies. The union has now become a strong advocate of worker ownership, and is actively working to develop new models based upon the Mondragón Cooperative Corporation in the Basque country of Spain. This highly successful grouping of worker-owned cooperatives employs 85,000 people in fields ranging from sophisticated medical technology and the production of appliances to large supermarkets and a credit union with over 21 billion euros in assets.

The developmental trajectory from Youngstown to today illustrates what might be called “forced institutional innovation”—a process that, once underway, also suggests further possibilities for larger-scale and more refined development both within Ohio and elsewhere—especially as many other parts of the nation now experience the massive job losses and community decay that hit Ohio and other rustbelt states three decades ago. Critically, all involve new ways to give concrete meaning to the idea of democratizing capital.

§§§

One line of this development points towards increasing knowledge, along with local innovation and the buildup of new and ever more sophisticated strategies over time. The most recent and advanced of these is a major effort in Cleveland that has taken the idea of worker-ownership forward in new ways. The “Cleveland Model” now underway in that city involves an integrated complex of worker-owned cooperative enterprises targeted in significant part at the $3 billion purchasing power of such large scale “anchor institutions” as the Cleveland Clinic, University Hospital, and Case Western Reserve University. The complex also includes a revolving fund so that profits made by the businesses help establish new ventures as time goes on. (Full disclosure: I was one of the chief planners of the Youngstown steel effort, and The Democracy Collaborative, an organization which I co-founded, played a major role in helping develop the Cleveland effort.)