The Seeds of a Quiet Economic Revolution: A Review of Gar Alperovitz’s “America Beyond Capitalism“

/040612-armoudian(Image: Democracy Collaborative)It is not news that Americans overwhelming disapprove of the job Congress is doing. And likely, it’s not surprising that two-thirds of Americans told a London-based firm, Absolute Strategy Research, that they believed that the economic system in the US is not working for most Americans and is unfair. But might these beliefs signify something bigger? Scholar and author Gar Alperovitz believes that these phenomena, along with a widespread belief that people within this “democracy” have “almost no say in the government,” are signs that a system, such as our own, is in decay. But Alperovitz is not one to devote too much time and attention to complaints or worries. Rather, he is a visionary who sees that, through the cracks of a faltering system, opportunities – and truly profound opportunities – can and often do arise. And that is one of the central messages in “America Beyond Capitalism: Reclaiming our Wealth, Our Liberty, and our Democracy.”

Upon reading his hopeful treatise that sheds light on the possibility of an emerging new economy, big-picture questions arise: What would happen, for example, if the so-called 99 percent ignored the 1 percent and began to build a new economic model from the ground floor up? What if masses of people stopped trying to reform an increasingly unworkable system and instead focused on constructing an economy of shared institutions that were fundamentally fair, just, respectful and sustainable? Perhaps, as important as the questions, the fact that the answer is beginning to peak out from underneath the veneer is even more inspiring. This is one of the gifts in “America Beyond Capitalism.”

All over the US, people are experimenting with new workplace models that shun the top-down, too-big-to-succeed-for-us corporation. And with these new enterprises, they are collectively taking part in a potential economic revolution, which could also revolutionize politics by both building communities and contributing to the construction of a more meaningful democracy, one based on true political equality.

In “America Beyond Capitalism,” Alperovitz explores the scope of these endeavors and details the profound impact that some of them are having on their workers, communities and the ecology. While he acknowledges that the size of the movement pales in comparison to the behemoths of the publicly traded corporations, he sees that their potential collective impact, should the trend continue, can be even more significant, possibly reversing the long negative trend he describes as, “Americans have been steadily becoming less equal, less free and less the masters of their own fate.” Adding to their contributions, many of these projects simultaneously build sustainable alternatives to the fossil fuel economy, thereby securing a healthier future for all of us.

One small example is in the economically troubled city of Cleveland, Ohio, where the Evergreen project was born. This network of worker-owned cooperatives simultaneously offers employment, ownership and service to the community while living the principles of workplace democracy, equality and sustainability. Their green laundry service, solar installation company and industrial scale greenhouse contribute to the development of a green economy, while their customers – the universities and hospitals – help to assure a long-term symbiotic relationship.

The Evergreen cooperative project is one of about perhaps 1,000 worker-owned cooperatives in the US. Others include the Bay Area’s Rainbow Grocery, the Arizmendi Bakeries and Arizmendi’s sister eateries, among others. While these worker-owned cooperatives are perhaps making the smallest economic impact of the enterprises featured in Alperovitz’s book, they are the most fair, democratic and transformational. Their intellectual roots originate from the 80,000-worker-owned Mondragon, the world’s largest worker-owned, democratically operated cooperative. This company is the seventh largest in Spain and remains competitive while maintaining its fundamental principles of cooperation, participation and social responsibility. Mondragon’s highest to lowest pay ratio, for example, is about four to one, rather than 200 or 300 to one, the latter ratio not atypical at many multinational corporations. And – like many historical transformational efforts – Mondragon emerged from crisis.

More recently, Mondragon has struck a deal with the United Steelworkers and the Ohio Employee Ownership Center. Together, they will build yet another variation, a “union-cooperative,” merging the tenets of worker-owned cooperatives, such as democratized workplaces, with collective bargaining.

Mondragon-style cooperatives are just one of many new alternatives to the centralized corporate workplace, Alperovitz writes. Other models include nonprofit neighborhood corporations, community trusts, municipally owned enterprises, consumer cooperatives, mission-driven nonprofit organizations and worker-owned companies. In Newark, New Jersey, for example, Alperovitz draws us to the New Community Corporation, a neighborhood nonprofit that operates several businesses – including a supermarket and home construction – and feeds its revenues into community services such as health care, education, daycare and job training. New Community, which formed after the devastating urban riots in the 1960s, owns an estimated $500 million in real estate and related ventures, employs 2,000 people and creates some $200 million in economic activity per year.

Worker-owned companies take on various shapes and structures, some more progressive than others. One of the highlights in “America Beyond Capitalism” is the Delaware-based W.L. Gore, which makes Gore-Tex Apparel. The company, owned since 1974 by roughly 6,000 worker-owners, maintains a non-hierarchical structure (no bosses, no titles), regularly tops the Fortune list of “Best Companies to Work For,” and generates revenues of $1.33 billion (in 2003). W.L. Gore is one of several companies that are entirely owned by their employees. Most fall under the umbrella of ESOPs (employee stock ownership plans), which are often imperfect, but when done fairly, are supported by many on both the left and the right sides of the political aisles. Altogether, some 13 million Americans are simultaneously workers AND owners in the 11,000-plus employee-owned companies. Those numbers today represent many more people than the private-sector unions.

Innovative strategies for a more pluralistic wealth are springing up on the municipal and state level as well. Numerous cities lease real estate to commercial tenants, raising millions of dollars per year. San Diego’s 700 leases, for example, raise some $40 million per year for the city. Real estate is not the only venture, however. Some cities offer lower-priced Internet, cable and telephone service to their residents, while others own professional sports teams.

In this time of economic trouble, Alperovitz’s second edition of “America Beyond Capitalism” gives us plenty of reasons to be optimistic, as millions of people are innovating and participating in some form of community-minded alternatives to the purely profit-oriented economic system. And when one steps back, what the picture demonstrates is that a neither-capitalist-nor-socialist economy is emerging. Rather, economic institutions of a smaller, more meaningful, more human-sized scale are gradually working to rebuild a “pluralist commonwealth” and a sense of community, as they restore some of our fundamental ideals, one enterprise at a time. And while they have a long way to go to impact the overall political and economic structure, they are profoundly important for several reasons: First and foremost, they support their own communities, not just in services and jobs, but by putting important values into practice. Simultaneously, they offer rich examples of how “business” can be used, not just for the wealth of a few, but to enrich the community as a whole, while also enriching the human spirit. “America Beyond Capitalism” belongs in all of our libraries and especially in the libraries of economics departments and business schools, so they may teach a new generation of entrepreneurs about building an economy that works for everyone.