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6 Economic Steps to a Better Life and Real Prosperity for All

We've got to break out of the old ways of thinking about the economy.

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4. Leverage City Assets

Yet another arena of institutional growth involves municipal development. By maintaining direct 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 fuel electricity generation, thereby providing both revenue and jobs. There are roughly 500 similar projects nationwide. Many cities have established municipally owned hotels. 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. Significant public institutions are also common at the state level. CalPERS, California’s public pension authority, helps finance local community development needs; in Alaska, state oil revenues provide each citizen with dividends as a matter of right; in Alabama, public pension investing has long focused on state economic development.

5. Organize for the Long Haul

You can think of the slow buildup of democratizing strategies as the pre-historical developmental work needed to clarify new principles for larger scale application. Just as in the decades before the New Deal, state and local experiments in the “laboratories of democracy” may suggest new larger scale approaches. The new direction has four aspects; democratization of wealth; community, both locally and in general; decentralization in general; and substantial but not complete forms of democratic planning. Let’s take a look at each of these.

Democratization of Wealth: Institutions like public banks challenge the idea that private corporate enterprise offers the only possible way forward. They also help open new ways of thinking about how to get meaningful larger scale democratization. Historically, cooperatives and other federations also helped establish institutional and organizational support for explicit political efforts in support of specific policies. Critically, they also help stabilize local community economies, since such institutions tend to be anchored locally by virtue of their democratic ownership structure.

Rethinking Community: If you want to alter larger patterns of wealth and power, you have to build a culture that reconstructs “community.” In economic terms, building community means introducing and emphasizing practical forms of community ownership. In the Cleveland effort, for example, the central institution is a community-wide, neighborhood-encompassing non-profit corporation. The board of the non-profit institution includes representatives both of the worker cooperatives and of key community institutions. Worker co-ops are linked to this (and to a revolving fund at the center), and though independently owned and managed, they cannot be sold without permission from the founding community-wide institution. The basic principle is that the effort should benefit the broader community, not only or simply workers in one or another co-op.

Decentralization: Can there be meaningful democracy in a very large system without far more rigorous decentralization than is commonly assumed in the United States?  It is a commonplace that Washington is “broken.” But part of the problem has to do with scale. We rarely confront the fact that the United States is a very large geographic polity: Germany could easily be tucked into Montana. The United States is also very large in population—currently more than 310 million, likely to reach 500 million shortly after mid-century.

Decentralization in these circumstances is nearly inevitable, and if the continental nation is too large and most states are too small to deal with economic matters, what remains is the intermediate scale we call the region— a unit of scale that is likely to become of increasing importance as time (and population growth) go on. The question is almost certainly how to regionalize, not whether to do so—what powers to maintain at the center and what powers to relegate to various smaller scale units. The principle of subsidiarity—keeping decision-making at the lowest feasible level, and only elevating to higher levels when absolutely necessary—is implicit as a guiding principle.