Gar Alperovitz

Movements and History: Gar Alperovitz Podcast – February 22, 2012

admin — Wed, 22 Feb 2012 19:32:48 +0000

Movements and History: Gar Alperovitz Podcast — 2/22/2012

Baltimore Sun Op-Ed: New Thinking for City Finances

admin — Wed, 22 Feb 2012 14:37:29 +0000

My latest opinion piece on alternatives to municipal austerity ran in the print edition of today’s Baltimore Sun:

City finances have long been under pressure, but the Great Recession and steady attacks on federal and state spending have compounded local financial difficulties. The National League of Cities’ annual research brief, City Fiscal Conditions, documents rapid deterioration. Reported revenue declines of 2.5 percent in 2009 and 3.2 percent in 2010 were unprecedented in severity in the 25-year history of the survey. In 2010, 79 percent of cities reported cutting personnel, 44 percent cut services, 25 percent cut public safety spending, and 17 percent cut current employees’ health benefits. Expectations going forward are even more downbeat. Hard times call for new thinking. We are going through a systemic crisis, not simply a political crisis, and the assumptions of the last three decades about the relationship among politics, social and economic programs, and the economy are now obsolete. Cities everywhere can find surprising answers to fiscal difficulties by looking to scores of little-known innovative strategies under way in diverse communities across the nation.

The economic crisis has, for instance, produced widespread interest in the Bank of North Dakota, a highly successful state-owned bank founded in 1919. Over the past 14 years, the bank has returned $340 million in profits to the state, with broad support in many cities from the business community as well as progressive activists. Elsewhere, cities from Lowell, Mass., to Berkeley, Calif., have discovered they can make better use of the millions of dollars that temporarily sit in bank accounts by choosing where to place deposits based on banks’ willingness to re-lend those dollars to meet local community development goals. This strategy can stimulate local economic development without placing new burdens on taxpayers. Another promising direction is generating revenue through direct city ownership of land and businesses. What might once have been called “city socialism” is now commonly dubbed “the enterprising city,” with Republican and Democratic mayors alike involved in efforts ranging from land development to Internet and wi-fi services. In many cities, profits from municipally owned electric utilities also help finance other services and thus reduce the tax burden. In Los Angeles, for example, the Department of Power and Water contributes about $190 million per year to the city’s revenues. Still other cities have created new businesses to promote local economic development. Hundreds of municipalities, for instance, generate revenues through landfill gas-recovery, turning the greenhouse gas methane (a byproduct of waste storage) into energy. Others have established programs to make equity (venture capital) investments in local firms and share in their success. San Diego, for instance, has invested $2.5 million in an “emerging technology” fund targeting small businesses in low-income communities. In 2011, Maryland Gov. Martin O’Malley restarted a similar program, the Maryland Venture Fund, which had previously returned $61 million to the state on the $25 million it had invested it local companies. At present, city and state governments spend roughly $60 billion on economic development incentives (tax abatements, tax-increment-finance bond financing and the like). Much of this spending is pure folly: Maryland’s $44 million retention subsidy to Marriott in 1999, awarded after the company had already decided not to relocate, is a particularly egregious example. A 2002 study of the Connecticut Development Agency found that companies benefiting from government subsidies “had created only 9 percent of the jobs they had forecast” and that the average subsidy for each new job was $367,910. Nonetheless, for a politician on a two- or four-year electoral cycle, such “easy remedies” are all too tempting. Similarly, some mayors and governors have sold off public assets, sacrificing long-term fiscal sustainability for short-term gains. A more sensible municipal development agenda might leverage still other public assets to nurture the local economy. For instance, the ability of city governments to use the municipality’s purchasing power to keep business dollars circulating locally is vastly under-appreciated. Used wisely, city purchases can provide a revenue-neutral way of supporting the development of community-anchored businesses: directing city contracts to companies structured in ways that keep jobs in the city.

A new model of anchored ownership in Cleveland suggests what can be done: The purchasing power of the city’s existing “anchors” — hospitals, universities and local government itself — is used to provide a long-term market for a network of green worker cooperatives in some of the city’s lowest-income neighborhoods. This not only provides “anchored” jobs but also builds the tax base and reduces the demand for city social services. Cities could take an even more active role in fostering this kind of development. A municipality, for instance, could use money currently raised through tax increment financing (TIF) and other mechanisms that now support relocation incentives to instead support a “Cleveland model” approach, reducing government expenditures and raising local tax revenues at the same time. In an age of increasing fiscal crisis, comprehensive city-level economic planning that draws on the new strategies being refined around the nation — together with similar initiatives at the regional and national levels — may offer the only way out of the trap of disinvestment, austerity, and a failing and negative municipal politics that pits taxpayers against public employees in so many of the nation’s communities. Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland and the co-founder of the Democracy Collaborative. His latest book is “America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy.” His website is garalperovitz.com.

Talking with Chuck Mertz of “This is Hell”

admin — Fri, 17 Feb 2012 16:21:06 +0000

Earlier in the month, I had the pleasure of speaking to Chuck Mertz, host of Chicago’s “This is Hell!” Listen to the interview below:

Download the audio

Noam Chomsky on “America Beyond Capitalism”

admin — Fri, 10 Feb 2012 23:20:45 +0000

Noam Chomsky, a long-time friend and colleague, recently gave a talk at the University of Maryland, where I teach political economy. His talk was entitled, “Crisis and Hope: Theirs and Ours” (a video of the entire talk is embedded at the bottom of this post). During the question-and-answer period after his speech, he was asked by an audience member to provide his thoughts on the themes I put forth in America Beyond Capitalism. That segment and a rough transcript of his comments appear below: Q: I was wondering if you’d read Gar Alperovitz’s book, America Beyond Capitalism, and if you have, what you thought of his ideas in the book? Noam Chomsky: That’s a very important book, and the work that he’s doing that’s described there is extremely important. I mean, that’s one of the things that can be done — it’s very feasible. Now, the book reviews work that Alperovitz has mainly been involved in for some years, in trying to develop worker-owned enterprises, mostly in Ohio. It took off in Ohio for very interesting reasons. In, I guess it was 1977, as part of this change in socioeconomic policy, the US Steel Corporation decided to close down its operations in Youngstown, Ohio. Youngstown is a steel town that was built by, and around the steel industry. The working people and the community were extensively involved in steel production and everything that flows off of it, and manufacturing plants spawn all sorts of other things, so it was a steel town. US Steel decided to sell it off, kill the town. Instead of just giving up, the workers in the communities — who are called the stakeholders — offered to buy the plant and run it themselves. That could’ve been done; with enough public support, it could’ve happened. These were not public issues at the time. It did go to court. The union took the case to court to try to get the right to do it; they lost in the court. But they could’ve won, and it could’ve been carried forward. Well, so it was a kind of defeat, but like a lot of defeats, it wasn’t the end of the story: it was the basis of moving on to something else. And what it spawned was a lot of much-smaller-scale efforts to establish worker-owned enterprises. A lot of it’s called the Cleveland Model, a lot of them around Cleveland and other parts of Ohio, which are not huge enterprises, but there’s a lot of them. Alperovitz, in his book, reviews all of this; you can look at it for details. And these are, notice, worker-owned — that’s short of worker-managed, that would be another step towards liberation. But it’s real and it’s a way of reacting to the collapse of the productive system of the 99% by just taking it over. Actually, if you take a look at standard texts in business economics — you know, nothing radical — standard texts in business economics point out that there is no economic principle or any other principle that says that corporations should be controlled by shareholders. Shareholders, incidentally, doesn’t mean someone whose pension funds has $2 of theirs in it as a share. Shareholders are very narrowly concentrated. Shareholding is like, top 1% of the population, most of it. And that means big banks, interlocking directorates and so on. There’s no economic principle that says who should determine investment policy like shipping production to Foxconn. There’s no law of economics that say that should happen. It could just as well be done by stakeholders — by the workforce and the community; perfectly consistent with anything that anyone claims about economic theory. You know, there’s no reason for the Occupy movement to be less imaginative and ambitious than standard business texts, so yes, stakeholders could take over parts of the economy that are being dismantled and run them effectively and direct them to different purposes. These are very feasible tracks. For example, one of the things that Obama’s praised for by kind of left-liberal economists, Paul Krugman and others, is for having essentially nationalized the auto industry and reconstructed it. That’s pretty much what happened. Well, once the auto industry was nationalized, there were alternatives. One alternative was to reconstruct it and hand it back to, essentially, the original owners. Not the same names, but same class, same banks, and so on, and that’s what was done. Another possibility would’ve been to hand the auto industry over to the workforce, and the communities and stakeholders, and redirect it towards things that the country really needs, not only badly needs. High speed rail for example — it’s kind of a shameful situation when you compare the U.S. to other countries, much poorer countries. It would be a tremendous economic benefit and just a human benefit in all kinds of respects. That means I could’ve got here in two hours, instead of wasting time at the airport, for example. Literally two hours. I happened to be in France a couple months ago giving talks, and the last talk I gave was in southern France, and I had to get to Avignon (southern France) to the airport (de Gaulle), and of course there’s a train that goes directly to the airport. And it took two hours. It’s the same distance as Washington to Boston. Here it takes, I don’t know what 8 hours or something. All of this, these are human costs, they’re economic costs, the things the country badly needs. The skilled workforce in the auto industry could easily be reconverted to producing things like this and other things people need. That could be done under the ownership and management of the workforce in the communities. Well that was an alternative. But getting back to Gar Alperovitz, this is the kind of thing he’s talking about. I don’t remember if he talks about that particular case, but it’s the kind of case that’s coming up all the time. And these are very feasible things. They’re not far out in utopia. And they can have a big effect on the society. Alperovitz is one of the very few people who’s really doing, really, very good work on this. The book is certainly worth reading, thinking about what it describes, what options it suggests. But this comes up all the time, I should say. In Boston, about a year ago, in a suburb in Boston, Taunton, a manufacturing town, there was a reasonably successful high-technology, small manufacturing plant. It was producing high-tech equipment for aircraft. Apparently, they were doing okay, but they weren’t making enough profit for the managers and the multi-national corporation who owned them. So the corporation wanted to just dismantle it. The union, United Electrical Workers, wanted to buy the operation and run it themselves. Well, the corporation wouldn’t agree. I suspect that they wouldn’t agree mostly on class grounds. Kind of not a good idea to let people own and manage their own workplaces — they’ll get the wrong idea. Anyhow, for whatever reason, it didn’t work. But, if say, the Occupy movement had been around and had been active and energetic enough and had reached out sufficiently, that’s the kind of thing it could’ve participated in and supported, and maybe gotten it over the edge. And that’ll be important in maintaining, say, manufacturing in Massachusetts. And that kind of thing happens all the time. These are options that are all over the place. NOAM CHOMSKY “CRISIS AND HOPE: THEIRS AND OURS” from arhu on Vimeo.

Talking with Cyrus Webb on “Conversations Live”

admin — Mon, 06 Feb 2012 15:04:07 +0000

Below is my radio interview with Cyrus Webb, host of Conversations LIVE!. Beyond a great interview, he has also posted a wonderful review of my book America Beyond Capitalism on Amazon:

We all have our views, and I think that is fine; however, at the end of the day our goal should be to look for solutions instead of just reasons to fight and try to keep someone else from a victory. That is seen all around us, but especially in politics. When it comes to what will help us to be the country we were meant to be, it is books like Gar Alperovitz’s AMERICA BEYOND CAPITALISM that helps us to remember what is really important today. Though it is obvious he is more a supporter of the Progressive movement and the direction they would like to see the country head in, Gar is open to the fact that all of us regardless of our political views have to be able to work together to see the kind of sweeping reform that is needed for us to thrive. There is nothing wrong with being progressive or conservative. What is wrong is how far you are willing to take your views just to see your side win instead of the country winning. I read this book not just the sobering facts that it presented, but with the hope that all of us should have when it comes to the country and what is still possible. I, like Gar, believe that America’s best days can still be in front of us. What we have to learn to do, however, is get bi-partisanship more involved in the decision-making and not allow our egos and rigid thinking destroy us or any chance for recovery.

Listen to the interview:

Download the audio

Speaking at the Left Forum in NYC, March 17-18

admin — Wed, 01 Feb 2012 17:50:18 +0000

The theme of this year’s Left Forum, one of the country’s largest gatherings of progressive activists and intellectuals, is “Occupy the System: Confronting Global Capitalism.” I will be participating in two panels; the first is “The Next System: Exploring Economic Alternatives to Capitalism,” with my colleagues Richard Wolff and David Schweickart. (I had a wonderful conversation with Rick about moving beyond capitalism on his WBAI radio program, which is essential listening for people concerned with economic affairs. David Schweickart and I had a very in-depth dialog in November about economic democracy.) The panel will address capitalism, strategies of transition, and also focus on specific features of social and economic life that a post-capitalist vision must address, including: workplace democracy, community ownership, environmental sustainability, democratic planning, combating economic expansionism, fostering participatory culture, and expanding free time. I will also speak at a panel entitled, “Austerity v. Prosperity: Framing the Left’s Immediate Demands,” along with Green Party presidential candidate Dr. Jill Stein and The Nation‘s Washington correspondent John Nichols, among others. One can register for the weekend conference here, on the Left Forum’s website. I look forward to discussing these issues and learning from the other participants’ insights. I hope to see you there!

A round-up of reactions to America Beyond Capitalism

admin — Tue, 31 Jan 2012 20:08:47 +0000

I’m delighted to report that the thesis of America Beyond Capitalism has been the subject of thought-provoking commentary from across the political spectrum. In the New York Times blog “Economix,” Professor Nancy Folbre of the University of Massachusetts, Amherst wrote a piece last month entitled “Utopian Capitalism.” She discusses the admission among capitalists like Richard Branson of the Virgin Group that the “short-term focus on profit has driven most businesses to forget about the long-term role in taking care of people.” She continues:

If all owners, bankers and corporate executives were virtuous souls, capitalism might function flawlessly. Adam Smith outlined a similar argument in the mid-18th century, in “The Theory of Moral Sentiments.” The pursuit of economic self-interest, he explained, would generally be tempered by natural morality. … Most economists, whatever their political stripes, generally put more emphasis on incentives than on virtue. And most ordinary people understand that the incentives built into the global capitalist system tend to reward some very bad behaviors.

Large corporations can often squelch their competition. They can minimize their costs by dumping waste products into the environment, contributing to pollution and global warming. They can use their profits to buy political influence. If they don’t like the regulatory policies of one nation-state, they can simply shift their operations to another. … Can we do something to minimize the perverse incentives that our current form of capitalism creates and move closer to our free enterprise ideals?

In his new book, “America Beyond Capitalism,” and in a recent opinion article in The New York Times, Gar Alperovitz makes a strong case for promoting cooperatives and worker-owned businesses.

The idea of empowering workers and communities to be able to control the economic decisions that directly impact their lives has even been welcomed on the website of the business magazine, Forbes. In “Are We Wandering Toward Socialism?,” contributor Erika Andersen writes approvingly of a community-based conception of “socialism”:

[L]et’s step away from the fear-mongering for a moment and be clear – here’s the actual definition of socialism: “a theory of social organization that advocates the vesting of ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.” In other words, a system of cooperative vs. individual decision-making and ownership. … there are already many, many examples (some of them very innovative) in the US of cooperative or community ownership that have nothing to do with Federal, or even state, government. For example, Gar Alperovitz, a professor of political economy at the University of Maryland, wrote a really excellent, thoughtful op-ed piece in the NYT last month about just this fact. He notes, for instances, that 130 million Americans participate in the ownership of co-op businesses and credit unions, and that more than 13 million Americans have become literal worker-owners of more than 11,000 employee-owned companies. … Alperovitz offers the example of an integrated group of worker-owned companies in Cleveland that, in collaboration with local hospitals and universities, “has taken the lead in local solar-panel installation, “green” institutional laundry services and a commercial hydroponic greenhouse capable of producing more than three million heads of lettuce a year.”

Brave new world, in a good way…

My New York Times Op-Ed also led to a thoughtful review in Spain’s largest-circulation newspaper, El País. In it, Gabriel Jackson discusses my prior work on atomic diplomacy, and writes of the appeal of a cooperative economy [English translation]:

Last Dec. 15, an article appeared in The New York Times that led me to contemplate the future of the human race with slight optimism…[it] evaluates the importance of various political trends of recent years that virtually nobody has mentioned…

He goes on to advocate for scaling up worker-empowering and environmentally sustaining projects to deal with global problems:

Today, and even more in the near future, the fact that the world population is rapidly growing makes it absolutely necessary to find some kind of global planning for the limited use of natural resources and some control of climate change. We also need to develop an international scale; a cooperative economy which Professor Alperovitz assures is increasing in the U.S. with the intention to overcome the economic disaster of 2008. A combination of elements is by no means easy, but necessary.

Finally, the new edition of America Beyond Capitalism has been able to provide some historical context for younger readers. I mention in my Times piece, which was reiterated by Folbre and Jackson, that public opinions on economic systems are shifting. Considering that a very recent Pew Research Center poll found more support for “Socialism” than “Capitalism” among those 18-29, one of my goals is to clarify those terms, and ask the question, “If you don’t like capitalism or state socialism, what do you want?” (My recent lecture exploring this question can be viewed, listened to, or read.) Blogger Peter Beattie, who wrote a book review entitled “America towards cooperativism,” recently framed the issue of the prospects of systemic change as such:

If I were to propose a way to put the United States, and the rest of the world, on a path towards a sustainable economy and a liveable, humane, and vibrant society, I would begin like this: First, I would nationalize the media, revising the constitution to institute the media as a democratically-controlled, de jure fourth branch of government. I’d then turn to the nationalization of the banks, energy companies, and all other natural monopolies, creating a democratic governing structure for nationalized industries equally responsive to their workers and the public at large. Then I’d cut the military by 80% or so, re-purposing “defense” companies with government contracts to build a sustainable energy infrastructure, and a sustainable agriculture system. Maybe then I’d focus on democratizing university governing structures while increasing funding both to eliminate tuition fees and to equip them to produce far more graduates with advanced degrees to form the core of a massive increase in adult education nation- and worldwide. Oh, and then there’s the matter of instituting maximum work weeks and work-sharing requirements, to both increase free time and eliminate unemployment.

Unfortunately, taking a flight of fancy such as this soon puts one in the position of a Wiley E. Coyote, pausing and looking down to realize that he has left the ground beneath him a while ago, and is now hundreds of meters above the floor of a canyon. As one plummets down, reality becomes clear: the next presidential election will be between a Mormon private equity capitalist and a milquetoast reformer with the daring of an ostrich and a big crush on financiers. There. Is. No. Hope.

But then comes a book written by someone with over half a century’s worth of experience with social change, to say: “those who say that nothing can be done because reactionaries control everything simply do not recall or do not know how impossible the world felt before the ‘unexpected’ explosions of the 1960s.” Well – that is me. “Those who tell me the opposition to change, now, is so great that nothing can be done would do well to read just a bit about what it was like before the civil rights movement was a movement.” Touché! OK, old man – whaddya got? … The heart of the book is a revealing, surprising, and heartening description of how much progress has already been made, under the radar, in a staggering variety of cooperative, municipal and employee-owned enterprises. … As opposed to my flight of revolutionary fancy above, Alperovitz’s vision is a piecemeal, ground-up process of continual development and improvement. His idea, it seems, is that the cooperative sector can grow to such an extent that its existence, and viability, will become apparent on a national level. And, when the next economic crash comes (just give the financial sector a little more time), the idea of cooperativism will be prominent enough that it will form the paradigm the federal government will have to turn to in reforming and rebuilding the economy.

Interview with Bob Edwards

admin — Thu, 26 Jan 2012 17:31:48 +0000

I had the pleasure of speaking to award-winning radio journalist Bob Edwards about my book America Beyond Capitalism for his show on SiriusXM.

You can purchase the podcast of the interview here.

David Bollier on America Beyond Capitalism

admin — Thu, 26 Jan 2012 16:26:29 +0000

(Reposted, under Creative Commons license, from David Bollier’s excellent website on the commons ) While a great many commons seek to develop alternatives to conventional businesses – and even to bypass markets altogether – the struggle to democratize capital should not be lost in the shuffle. Popular ownership of capital assets and business enterprises is still a great strategy for building the commons and advancing the public good. Fortunately, there’s a growing enthusiasm for this approach. One of the most eloquent advocates for socially friendly forms of capital ownership – the French call it the “social economy” – is Gar Alperovitz, a historian and political economist at the University of Maryland and a founder of the Democracy Collaborative. Alperovitz’s 2005 book, America Beyond Capitalism, was recently re-issued, presumably because it speaks to the political moment. How can we make economic progress when banks and large corporations are simply looking out for themselves? How can we reduce wealth inequality when government is captured by corporations and the affluent? Alperovitz showcases the history and great potential of co-ops, worker-owned companies, and urban land trusts. He notes the constructive role that is played by municipal utilities, state-owned banks and state-chartered trusts such as the Alaska Permanent Fund. There are also dozens of cases in which states use their investment dollars to help communities, use government procurement to help worker-owned businesses, and provide venture capital to startups. These alternatives to traditional capitalist models are actually flourishing, Alperovitz notes: “We may be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing. Some 130 million Americans, for example, now participate in the ownership of co-op businesses and credit unions. More than 13 million Americans have become worker-owners of more than 11,000 employee-owned companies, six million more than belong to private-sector unions.” The great virtue of Alperovtiz’s hybrid “wealth building” models is that they “challenge dominant ideologies which hold that private corporate enterprise offers the only possible way forward; and they help open new ways of conceptualizing practical approaches to meaningful larger scale democratization.” As a theoretical approach, Alperovtiz focuses on the democratization of wealth; the mobilization of communities, especially at the local level; the decentralization of power; and democratic planning in support of community and long-term ecological and economic goals. Yet theory is not used here as an ideology or as a rhetorical posture. It is a way of describing projects that work. That is what makes so many of the examples in this book so appealing: they work. Chapter 7 surveys worker-owned firms as viable alternatives to footloose corporations. Chapter 8 describes “enterprising cities” that use their land, infrastructure and other resources to generate money for public purposes. Other chapters deal with local democratization and larger-scale “public trusts.” Alperovitz has focused a lot of his energies on Cleveland, where there are a variety of worker-owned businesses. Perhaps the most notable is the Evergreen Coop, which consists of a “green” institutional laundry, a solar-panel installation coop and hydroponic agriculture businesses. The details of these and other stories add up to a refreshing approach to economic and community development. Alperovitz writes:

Almost half the states manage venture capital efforts, taking partial ownership in new businesses. Calpers, California’s public pension authority, helps finance local development projects; in Alaska, state oil revenues provide each resident with dividends from public investment strategies as a matter of right; in Alabama, public pension investing has long focused on state economic development…. In Indiana, the Republican state treasurer, Richard Mourdock, is using state deposits to lower interest costs to employee-owned companies, a precedent others states could easily follow. Senator Sherrod Brown, Democrat of Ohio, is developing legislation to support worker-owned strategies like that of Cleveland in other cities. And several policy analysts have proposed expanding existing government “set aside” procurement programs for small businesses to include co-ops and other democratized enterprises. If such cooperative efforts continue to increase in number, scale and sophistication, they may suggest the outlines, however tentative, of something very different from both traditional, corporate-dominated capitalism and traditional socialism.

In a recent New York Times oped piece, Alperovitz noted that “this year some 14 states began to consider legislation to create public banks similar to the longstanding Bank of North Dakota; 15 more began to consider some form of single-payer or public-option health care plan.” So long as the national debate is locked into the old categories of “capitalism” vs. “socialism” — as if they were the only choices, and as if each were a monolithic creature — we will be stuck in a ditch, unable to bring about any systemic change. But if we can begin to see how a diverse array of community-based business models are succeeding, we may just glimpse a productive path forward.

Movements, History, and Economic Transformation

admin — Mon, 23 Jan 2012 19:22:17 +0000

(This is the complete interview, in one file, that has previously appeared here as individual segments)

Audio only: Gar Alperovitz: Movements, History, and Economic Transformation