The Emerging Shape of the Next System

This was the title of a workshop by economist and author Gar Alperovitz under the Economic Democracy “track” – one of 9 separate conferences taking place in at the Democracy Convention in Madison, Wisconsin. Alperovitz is among those who helped establish and maintain the Evergreen Cooperatives in Cleveland, Ohio.

A few general notes from this workshop…

– The economic system is broken, dysfunctional and in crisis.

– Both capitalism and state socialism are in the long term unworkable and unsustainable.

– At the same time, our economy at the moment produces $200,000 for a family of four on averages, however, our political policies create/enforce mass inequities/inequalities. Trend line by end of century: $1 million. Technology has produced this up to this point. Based on technology in future. If the average family of 4 had $100,000 and only had to work for, say, 20 hours per week, this would open up tremendous democratic possibilities. The author Paul Goodman writes about this.

– Economic democracy is happening – over 120 million people in US are involved/participants in cooperatives of all types.

– We need to be serious about what we really want as an alternative to corporate, crony capitalism. It must be more than simply rhetorical. It has to be rigorous, specific, workable and sustainable.

– While a strong advocate of worker coops and worker ownership, Alperovitz feels that they are not the ultimate solution or alternative, since…
1. They must compete in the same market against private corporations. They end up turning to the same practices (cost reduction through externalities, etc.) to stay in business. Also, they often depend on the capitalist economy. The Evergreen Cooperatives in Cleveland, for example, depends on major medical corporations for their business.
2. They exist in a larger political economy where the43 are existing uneven institutional power relationships. Workers of a profitable cooperative business (say energy) will, for example, develop a political power base that will overwhelm other worker owned business. The political system will provide, as a result, uneven benefits to those more profitable and politically powerful cooperative businesses.
3. If the business has the potential to invest in technology to reduce costs, they must to it to compete. About the only way to do it through growth. Diminishing returns from investment in scale.

– Mondragon in Spain is often lifted up as a economic democratic future. There are 120 coops, 4% of Basque economy. It’s however an expansionary system in the global market up against global competitors. It’s not about planning, political structure or about a system, or a community. Not communitarian or socialist. They’re interested in saving jobs for Basque people. It’s a economic system that has a political system built around it.

– We are a growth system. A system that forever needs to expand in a capitalist system is an imperial system. It must expand economic system or it collapses. This is obviously unsustainable.

– A fundamental new economic system can’t be based on the corporation or state, but rather on the community which allows for coops, municipal ownership, worker ownership and entrepreneurs, coops, municipal ownership, worker ownership. All modern socialist systems include the role of entrepreneurs – as a source of innovation. Giant corporations that are de facto monopolies or oligopolies may have to be nationalized. Our scale of government many also need to change. Our existing constitution may need changing. The optimal size of governance for such a system should be larger that a state but smaller than a continent. There are existing regions of the country already beginning to act in such a economically/politically communal way – New England, California, the Northwest, even Texas. Rick Perry has actually written about this in his recent book.

– On the point of our Constitution, size and scale: Our founders believed class conflicts could be solved by growth and expansion — if you spread people out, they can’t get together and organize. But, if government got too big, it would become imperialistic. It needed to be large but not too large. Government got too big – we are imperialistic.





One thought on “The Emerging Shape of the Next System

  1. Thanks, Greg, for including the broader community in the Democracy Convention! Not quite like being there, but so much better than being completely left out. Not quite sure where Gar Alperowitz is going with his ideas, but hope you will clue us in when we see you.

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