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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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Democratic Planning: A well-designed planning system can change relationships between firms, the community and the market. Planning also needs to be democratic at all levels.

Take a look at Brazil’s innovations in participatory budgeting, where citizens determine major public expenditures – an idea that is gaining traction in Chicago. So far these experiments have definite limits since they are restricted to municipal budget decisions. But if the practice can be extended in scope and scale over time, it could provide an important mechanism for increasing meaningful democracy.

High-speed rail and mass transit are another area in which we can think about larger scale planning approaches. The United States has limited capacity to build equipment for any of this. But when the next crisis occurs in the auto or other industries, a public bail-out might restructure firms so that we could use public contracts needed to build mass transit and high-speed rail in ways that also help support the development of quasi-public national and community-based firms—both to produce what is needed and simultaneously to help stabilize local communities. 

6. Cut Corporate Power Down to Size

To deal with economic issues, ecological challenges and local community stability, 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.

In addition to carbon emissions, countless studies have documented growing energy, mineral, water, arable land and other limits to unending growth. Yet the trends continue: The United States, with less than 5 percent of global population, consumes 22 percent of the world’s oil, 13 percent of world coal, and 21 percent of world natural gas. From 1940 to 1976, Americans used up as large a share of the earth’s mineral resources as did everyone in all previous history.

At some point, a society like the United States that already produces the equivalent of over $190,000 for every family of four must ask when enough is enough. As Juliet Schor has argued, one key change is to encourage less consumption and more leisure time. That means reforming unemployment insurance policy to encourage work sharing, changing government labor practices to model shorter working hours, and discouraging excessive overtime. We need to restore balance on a personal level, but we can’t ignore the big systemic challenges. As former presidential adviser James Gustav Speth has observed: “For the most part we have worked within this current system of political economy, but working within the system will not succeed in the end when what is needed is transformative change in the system itself.”

As a matter of cold logic, if some of the most important corporations have a massively disruptive and costly impact on the economy and environment—and if experience suggests that regulation and anti-trust laws are likely to be largely subverted by these corporations— 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. Conservative Nobel Laureate George Stigler repeatedly observed that regulatory strategies were “designed and operated primarily for [the corporation’s] benefit.” Henry C. Simons, Milton Friedman’s mentor, was even more forceful. “Turned loose with inordinate powers, corporations have vastly over-organized most industries,” Simons held. 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.”

For many decades, the only choices to many have seemed state socialism, or corporate capitalism. When traditional systems falter and fail, new ideas spring to life. Little noticed by most observers, handholds on processes of potentially important new forms of change have been quietly developing around the country. These changes build upon each other to create an evolutionary process that has the power to transform the way we live – for the better.