By Pete Dolack
It is never sufficient in itself to be against something. Activists seeking to bring a better world into being have to be for something. That is no easy task for people advocating for something better than today’s world of corporate domination, harsh austerity and races to the bottom.
It is not an easy task because capitalists have saturated the world’s cultures with their ideologies, and the 20th century’s biggest anti-capitalist challenge — state ownership of the means of production on the model of the Soviet Union and its Central European satellite states — has irretrievably lost credibility. Yet the capitalist triumphalism that smoothly maintains nothing could possibly be wrong with our modern consumer paradise, which continues essentially unabated despite four years and counting of deep malaise, can not mask profound structural problems.
The endless drive on the part of capitalists to increase profits that leads to continual movements of production to new sources of cheaper labor; the continual downward pressure on wages that leads to an inability of people to be able to buy what is produced; the continual despoiling of the environment under the pressure of ever more intense competition; and the finiteness of the Earth’s resources in the face of a structural need for limitless expansion all impose limits on the capitalist system.
Grandiose plans to strip-mine the Moon and the asteroid belt aside, humanity will have to develop a more stable, more humanistic system of production and consumption. A realistic plan to guide the world out of runaway capitalism and into a new system that is sustainable is necessary.
Can such a sustainable, more humanistic system evolve out of capitalism itself? Gar Alperovitz, in his newly re-issued book America Beyond Capitalism,* firmly believes the answer is yes.
Explicitly attempting to find an intermediate course between reform and revolution, Professor Alperovitz has laid out a program designed to gradually bring large corporations under public control and therefore make them socially accountable through a “Public Trust” system whereby public institutions buy progressively larger portions of corporations’ stock. Concomitantly, cooperatively owned enterprises rooted in their communities and enterprises owned by local governments would be nurtured; community-development organizations expanded and funded through progressive taxation; and long-term strategies would be implemented to capture the new wealth that will be created as productivity continues to increase in the future.
Details of many of these plans are not yet worked out. The details of a better world can only be worked out in its creation, and therefore Professor Alperovitz provides conceptions rather than details. New ideas have to begin somewhere — conceptions based on real-world conditions are the beginning place for serious ideas. Is the professor’s optimism warranted? That is a difficult question to answer, and one that this review will return to presently.
Professor Alperovitz introduces the term “Pluralist Commonwealth” to encompass his ideas of leveraging the structures of modern capitalism for a transition to a democratic, decentralized system in which the wealth created in production would be distributed fairly; economic power has been wrested from a small class of capitalists so that economic and political power is no longer concentrated; and the length of the workweek is gradually reduced so that everybody has the time and opportunity to participate in community decision-making.
None of the pieces of the Pluralist Commonwealth system constitute leaps or revolutionary breaks. Instead, the author assembles an impressive collection of ideas and institutions already in existence; ideas for building upon these; proposals for new institutions and structures that flow out of existing ones; and concrete measures to break down racial, gender and other disparities. He is not shy about analyzing an ideologically diverse collection of thinkers and writers: In one three-paragraph stretch, for instance, he quotes favorably Friedrich Hayek, Hannah Arendt, Jane Jacobs and W.E.B. DuBois.
But fear not those of you who blanch at the mere mention of neoliberal godfather Hayek (a number that would include myself). Professor Alperovitz has assembled a damning array of statistics to illustrate the debilitating inequality of the United States — among them, that one percent of U.S. households hold half of the entire country’s wealth; that corporate taxes accounted for 35 percent of federal receipts in 1945 but only seven percent in 2003; and that 300 multi-national corporations account for 25 percent of the world’s productive assets. With such concentrations of economic power comes instability at the community level because corporate power can shutter enterprises that are depended on for jobs, he writes:
“A central question concerns the economic underpinnings of local democracy. It is obvious, for instance, that active citizen participation in local community efforts is all but impossible if the economic rug is regularly pulled out from under them. What, precisely, is ‘the community’ when citizens are forced to move in and out of specific geographic localities because of volatile local economic conditions? Who has any real stake in long-term decisions? That a substantial degree of economic stability is one of the critical preconditions of local involvement is documented in several important studies. …
A related issue involves the power relationships that set the terms of reference for municipal government. Numerous scholarly studies have demonstrated that local government decision making commonly is heavily dominated by the local business community. Commonly, too, the thrust of decisions favorable to business groups radically constrains all other choices. The use of scarce resources to develop downtown areas, and especially to attract or retain major corporations, inevitably absorbs funds that might alternatively be used to help low- and moderate-income neighborhood housing, schools, and community services.” [page 47]
That the vast size and reach of corporations is debilitating to democracy is obvious; Professor Alperovitz even quotes conservatives to that effect. But he goes beyond the size of gigantic enterprises to the gigantic size of the United States, arguing that the very size of the U.S. (and its projected population increase this century) is a hinderance to democracy as well. He asks:
“[I]s it really feasible — in systemic and foundational terms — to sustain such values [equality, liberty and democracy] in a very large-scale, centrally governed continental system that spans almost three thousand miles and includes almost 300 million people? And, if not, how might a democratic nation ultimately be conceived?” [page 63]
Following up on this idea later in the book, he concludes that the “regional” level would be the appropriate level to deal with economic and political issues. Most U.S. states contain too small a population to solve large problems on their own; Professor Alperovitz conceives a region as the equivalent of a large-population state such as California or Texas, or a group of states such as New England, seeing such large states or groupings as the equivalent of stable, midsized European Union countries such as the Netherlands.
Underlying this advocation of regionalization is the idea that decentralization is more conducive to local democracy. To support his argument, he cites U.S. Supreme Court decisions overturning federal laws in favor of state powers and the increasing assertiveness of state governments in challenging federal laws.
But here we should pause for further thought. That trend, if anything, is stronger than when America Beyond Capitalism was originally written in 2005, but these Supreme Court decisions have been ideological and political pronouncements backing conservative attacks on federal protections, not legal decisions or responses to popular pressure. Frequently, the court strikes down state laws that provide protections beyond federal law but that are opposed by the Right on ideological grounds.
Both political devolution, as a concept, and Professor Alperovitz’s contention that democracy can’t flourish unless it is strong at the local level are sound, but it is at our peril that we fail to distinguish properly between the current conservative campaign to impose an extremist agenda masquerading under the guise of “states’ rights” and a genuine grassroots movement to promote local control and progressive change.
The heart of America Beyond Capitalism’s concept of economic and political democracy is the “Pluralist Commonwealth.” The author, in broad strokes, provides an interesting, worked-out conception of gradually bringing large-scale corporations under public control through acquisitions of their stock. There is a clear goal in mind:
“The schematic model … prioritizes a variety of strategies to undergird local economies and thereby establish conditions favorable to nurturing local civil society associations and to increasing local government’s power to make meaningful decisions. Partly to achieve such local democracy objectives — but for much larger reasons as well — the model also projects the development over time of new ownership institutions, including locally anchored worker-owned and other community-benefiting firms, on the one hand, and various national wealth-holding, asset-based strategies, on the other. These would ultimately take the place of current elite and corporate ownership of the preponderance of large-scale capital.” [page 70-71]
These ideas come with a freely offered, and appropriate, caveat that the details need to be worked out. Nonetheless, the strategy of carrying out a program of bringing large corporations under public control through acquiring controlling blocks of their stock could have been articulated with greater clarity. At the national level, a new institution given the generic name “Public Trust” is conceived to “oversee the investment of stock on behalf of the public, as state and other pension boards commonly do today.” Proceeds could be directed toward individuals, local or higher-level governments, or funding of public services.
Professor Alperovitz projects that:
“Over time, a fundamental shift in the ownership of wealth would slowly move the nation as a whole toward great equality directly — through, for instance, worker-owned enterprises; and also indirectly — through a flow of funds from the larger asset-based strategies and investment on behalf of the public.” [page 71]
The capital needed to acquire the stock of large corporations would be assembled from higher taxation of elite incomes and from setting up public banks that would loan money that would accrue from profits and dividends of stock held by them.
“The Pluralist Commonwealth structurally tethers large-scale firms at the top by lodging stock ownership in a Public Trust entity accountable to (and open to scrutiny by) the public — and it steadily expands four major vectors of activity and structure (robust community democracy, steadily increasing free time, greater citizen equality, regional decentralization) that over the long haul offer expanding opportunities for democratic control from the bottom. Additional elements of the model include new public chartering requirements, the addition of specific stakeholders to corporate boards, and the democratization of corporate structures from within.” [pages 73-74]
In addition to the gradual assumption of control of large corporations envisioned above, the book also advocates worker-owned cooperatives (which can be anchored to local institutions such as hospitals and universities that can steadily buy the cooperatives’ goods and services); companies owned by municipal and state governments (utilities and banks are common examples that provide lower rates and profits to their communities); and community-development organizations (which operate a variety of businesses that plow proceeds back into their communities).
Each of the examples in the above paragraphs already exist, and can be expanded. City-owned power companies are already common and generally offer lower rates than traditional companies. A network of cooperatives anchored to local institutions have been successful in Cleveland, and larger, freestanding cooperatives exist in a myriad of industries.
A significant change in the political climate of the United States would be a pre-condition of the “Pluralist Commonwealth” coming to fruition. Citing an abundance of polls, Professor Alperovitz is optimistic that latent public support exists for such ideas. He also believes that the mounting costs of health care, Social Security and retirement in general will force a re-thinking of existing structures and ideas, bringing to the fore new concepts of ownership and control.
The “Pluralist Commonwealth” concept rests in part on the vast increases in wealth and productivity of the past century and a half to continue throughout the 21st century. That, too, should give us pause for thought. The author, on the one hand, unsparingly points out the unsustainability of U.S. consumption but on the other hand situates his wealth-sharing strategy within a forecast of the dramatic growth of capitalism to continue unabated.
He notes the sixfold increase in per-capita production during the course of the 20th century, and projects a similar sixfold increase for the 21st century that would result in a cornucopia of wealth for everyone. Is another such leap possible? Given that natural resources are, or are soon to be, dwindling, and that successive introductions of machinery tend to yield declining rates of increase in productivity, it is reasonable to doubt the mature capitalism of today will produce the same gains for another century. The ongoing stagnation of the advanced capitalist countries, and that the strongest growth is invariably found in developing economies, adds additional doubt.
Then again, there is no reason why the wealth that exists today shouldn’t be shared far more equitably; if the present-day per-capita income were merely to keep pace with inflation or rise slowly, there would be plenty to go around.
Earlier, I asked if the optimism behind the “Pluralist Commonwealth” is warranted. The thought that kept leaping at me is this: The program, particularly as regards to the steady acquisition of stock in large corporations so that control of them is wrested from executives and speculators and given to the public, is dependent on capitalists sitting back and letting their power be taken away. There is absolutely no precedent of any capitalist class acting that way, and none would willingly consent to it.
Such a peaceful evolution would require not only a suite of new laws, it would also require huge organization, mass mobilizations and a very large majority that would retain their energies and motivation for long periods of time, perhaps decades. As just one example, corporations would have to be forced to issue new stock that would be sold to the Public Trust — a system-altering concept that would require an extremely powerful movement. Such a movement can easily be conceived, and would be articulating a concrete goal that is tangible and imaginable as a linear evolution from present-day economic structures.
It is possible to argue that powerful movements are also a necessary precondition for a revolution to be successful. Could the aim be higher? Could a successful completion of an evolutionary program build momentum for still greater changes? That is unknowable today. But the “Pluralist Commonwealth” program has the concrete benefit of providing a positive program of change. If there is to be any meaningful change it will have to come as a result of great struggle.
That acknowledgment is not missing from America Beyond Capitalism. Professor Alperovitz writes that people must “confront the emerging logic that suggests that either economic pain and social decay will continue” [page 213] or that diverse groups begin work on long-term systemwide change. He is appropriately realistic on the need for a high level of activism and organization to bring his ideas to fruition, while at the same time offering a set of concrete goals. Although the precedents are not a snug fit because transcending capitalist relations threatens the roots of the economic system (and those who profit well from it) in a way that social movements do not, he draws on the experiences of past struggles to conclude on an optimistic note:
“Long before the civil rights movement, there were many years of hard, quiet, dangerous work by those who came before. Long before the feminist explosion there were those who labored to establish new principals in earlier decades. It is within the possibilities of our own time in history that — working together and openly charting an explicit new course — this generation can establish the necessary foundations for an extraordinary future and for the release of new energies.
It may even be that far-reaching change will come much earlier and much faster than many now imagine.” [page 240]
Regardless if the transcending of capitalism is accomplished through a revolution, through struggling to rebuild in the ruins after a collapse or through an evolutionary change as envisioned in America Beyond Capitalism, a long, organized struggle will be necessary. The sooner the task begins, the less dangerous and difficult (comparatively) the change should be: Organizing change today is a hard enough task; having to do so in conditions of total collapse would be a nightmarish task none of us would like to contemplate.
* Gar Alperovitz, America Beyond Capitalism, second edition [Democracy Collaborative Press, Takoma Park, Maryland, USA and Dollars and Sense, Boston 2011]