Get Inspired

Written by Casey Lauderdale, Social Venture Network, @Radiant_City

Although it has now been nearly five years since the Great Recession began in September 2008, we are still struggling to find answers to the systematic problems it has brought to light.  Problems, such as the deep entrenchment of corporate power and the growing disparity of wealth in America- issues that have been trending for 30 years- were finally brought to the forefront of our national consciousness in the wake of the housing bubble burst and following market crash.  Yet, even though we are now talking about these issues, we still cannot surmise enough power or political will to solve them in the wake of institutionalized corporate power.

And so we must pause to ask, if this economic disaster­—one that has left many people homeless, many more unemployed, and started a nationwide protest— cannot lead to systematic change and stop these trends from continuing, what can?

This was the topic of Dr. Gar Alperovitz’s session, Wealth and Democracy: How to Change the System, at the 2013 Social Venture Network Spring Conference.  Gar is co-founder of the Democracy Collaborative and serves as the Lionel R. Bauman Professor of Political Economy at the University of Maryland.

Gar sets the tone at the beginning of the session by calling attention to the fact that embedded corporate power is a direct challenge to our democratic ideals when their interests are more influential in shaping policy around economic and environmental wealth than are the people.  Describing such subversion in his own experience, Gar shared that when working for the State Department, “We were often trying to do good things with foreign aid programs and by the time those aid programs got to the ground the corporations had beaten you to the punch and turned it into something other than what you wanted it [to be].”

The same is true for domestic policy as well.  So why do these players have such disproportionate power in the political arena?  In the past, Gar explains, there was an interlude where corporate power was counter-balanced by the influence of labor unions, which had become an institutional, systemic force.  Today, however, labor unions only comprise 11% of the government/nonprofit workforce and only 6.6% of the private sector workforce.  Without another countervailing institution (or a new system altogether) to replace the power that labor unions once held, corporations will continue to enjoy relatively unrestrained influence.  This influence can be maintained in our current systems because ownership of wealth is directly tied to the ownership of power.  Therefore, as Gar says, “If there is going to be a democratic system capable of altering these patterns [of disparity of wealth and power], we probably have to democratize the ownership of wealth in some way that builds up decentralized democratic forms that do change the counter-balance.”

Gar notes that this era is particularly exciting because people are beginning to ask deep questions about systemic change and, even more so, because he is seeing an important rise in what could be a replacement countervailing force: the co-op model.  One hundred thirty million Americans are part of co-ops, which is about 4% of our society.  These largely include agricultural co-ops, utility co-ops, and credit unions.  These organizations are giving people a different way to hold and distribute wealth.  Credit unions are particularly interesting because put together they hold more wealth than any of the five major banks, but currently do little with it.  Could credit unions and other cooperatives be a dormant force, waiting for a major revival?

Audience members were able to jump in with many strong ideas of their own, most of which revolved around either the mobilization of citizens as voters or as consumers.  One participant, Chris Norton of the Big Idea, shared that 46% of our society makes 77% of purchases and re-directing that money towards values-aligned businesses will create a countervailing force in of itself.  Judy Wicks followed him by stating that this is a primary goal of the organization she co-founded, BALLE, the Business Alliance for Living Local Economies.  She believes that if we can support and connect local economies, we will be able to build a more self-reliant system in which the people, rather than large corporations, have the greatest share of economic wealth.  Another participant added that technology is now poised to help make a significant impact in this way as it can connect consumers to the information they need to make values-aligned choices.

The second trend of comments from the audience invoked a need to better mobilize citizens as voters and to use the power of community organizing to shift political players.  Dolores Huerta, a life-long civil rights activist and co-founder of the United Farm Workers added her voice to this camp as did Mike Lapham of Responsible Wealth, who believes that “we can’t fix the problem through the same people who created the problem,” speaking mostly to the fact that those in political power have typically been well-to-do white males, and, as Mike notes, we need to look to more diverse populations both inside and outside of our community to find better solutions.  The bottom line is that even though corporations have an unfair advantage in the system to see their candidates elected, we still have “people power” that comes from the personal relationships that we create with one another, ultimately enhancing our power in the voting booth to fight for legislation that closes the wealth gap.

Whether it be through joining a coop, buying local, or becoming a community activist, we can only reduce the trends of growing wealth disparity and rising corporate power by decentralizing wealth away from the entrenched hands of the few.  Gar underlines that it will take more than just a “movement” to create such restorative change.  We must either become open to developing a new political system, or we must create another countervailing, institutional force, such as labor unions once were, to counter-balance corporate interests.  The Great Recession has put us all to attention with need for a course of action, and while the questions on how to act are still unanswered, the dialogue has begun.