Recreating Our Economy: The Untapped Power of Community Wealth Building

We have before us an incredible opportunity to transform our economy. The disastrous turn our fiscal health took in 2008 has forced us to really think about the way our country creates and distributes wealth. One positive outcome of the recession is a zeal and enthusiasm around the idea of community wealth building, a sustainable approach to building and developing successful, sustainable and vibrant local economies.

Community wealth building is premised on the idea of broadly-shared ownership that is locally-rooted and directed toward the common good. Ownership can take place in many different forms, chief among them:

The Democracy Collaborative at the University of Maryland, is pioneering the vision and strategy to address the chronic problems our economy faces, from high unemployment, to industrial cities that have been left to decay, to dangerously high levels of wealth inequality and the destruction of our environment. Led by Gar Alperovitz, the Democracy Collaborative is creating new concepts for how to solve these seemingly intractable problems.

Much of the excellent work done by the Collaborative in now available in “Growing a Green Economy for All,” by Deborah B. Warren and Steve Dubb. The study analyzed the potential of various ownership mechanisms to build community wealth vis-a-vis six key sectors in the green economy:

  • Renewable energy;
  • Green building;
  • Clean transportation;
  • Waste management;
  • Land use; and
  • Green financing.

The Collaborative’s findings are heartening and energizing. Though there are significant challenges ahead (lack of access to appropriate financing; regulatory barriers to community innovation; high front-end costs; unstable markets; insufficient infrastructure; and hesitant philanthropy), all signs point to positive opportunities available from community wealth building ventures.

Just a few examples that will inspire our forward momentum:

  • ESOPs are growing. Employee stock ownership plan companies employ 13.7 million Americans, comprising 9 percent of the total labor force and $900 billion in assets.
  • Public power is going to the people. Today, more than 25 percent of all US electricity is distributed via cooperative or public power company, promoting sustainability and profits geared toward member support.
  • Solar energy is heating up. We’re seeing more community-oriented companies like Namaste Solar, which is 100 percent employee-owned, and owns 20 percent of the market share in the CO solar market. A sign of good things to come.
  • One man’s trash is another’s treasure. Employee-owned Recology is a recycling industry leader serving more than 50 communities in CA.
  • Industries are transforming. The EBO Group in OH, formerly focused on the coal industry, now does half of its business in clean transportation, solar, and recycling.
  • Networks are building stronger, more supportive communities. WAGES is just one example of a network that has successfully launched five worker-owned cooperatives that provide living wages and ownership dividends through green home cleaning services.
  • Foundations are putting a stake in the ground. The Cleveland Foundation in OH, the nation’s second largest community foundation, has catalyzed a network of green worker- owned cooperative businesses, called Evergreen Cooperatives, that are generating wealth while promoting system-wide sustainability goals.

What we must do next is gather together intermediaries (credit unions, loan funds, community development organizations, place-based institutions, and advocacy and research institutions), policymakers, foundations and practitioners to develop local road maps for replicating the projects highlighted in “Growing a Green Economy for All” to create community wealth and build the sustainable economy of the future.

Keep visiting my blog as I will continue the conversation about community wealth building and impact investment. I look forward to the discussion to be had on these topics and your input in those discussions.

7 comments

  1. Excellent and most actual topic. This is the conversation which should happen at all political, social and business levels: what kind of a new economic and living model will we build after the old one, based on concentrated financial wealth and little real, sustainable and fairly distributed wealth, has failed with dramatic consequences.

    Please add to your list of new forms of ownership and responsibility the B Corporation. I find it to be a strong alternative to existing forms of incorporation within the for-profit sector.

    http://www.bcorporation.net/

  2. I think this is spot on Jeff. I’d add a couple thoughts to that. First, we need to have our community financial institutions like credit unions and CDFIs to begin to really think harder about how to invest in scalable activity. Micro-finance is fine as far as it goes but it is not a game changer in most communities. Second, we need to focus on the low-hanging fruit as a way to build momentum. The clearest example to me now is local food systems. There is no longer any need to “sell” consumers on the value of buying local. The problem is that we are not able to supply local to meet the demand. Our aggregation, stablization and distribution platforms are inadequate to the market. As you documented so well in the story of Organic Valley, an alternative strategy like a complex producer co-operative can have a huge impact on the market and become a major player against much larger and better capitalized competitors. Why? Because the demand is there and largely unmet.

  3. Jeffrey, this is very well put, and as a new reader to your blog, I can tell already that I’ll enjoy visiting here.

    I think one further task ahead of us is to democratize the green process a bit. With the concentration of wealth continuing all around, many people are still, or newly, unable to make purchase decisions on anything but price; and while building alternative business models is an important step, we also have a task to inject this attitude into the legacy business models that will still dominate the marketplace in the near future (and perhaps longer; tough to say what the future holds.) We not only have the task of building but also of reforming, and the business case that is clear to much of the world still needs to be spread in the corporate community.

    I think one way to do that is to activate the governance structures that are available to us. Pension funds have long-term perspectives and, often, dormant relationships with the companies they own. Getting that long-term ownership perspective to actively engage with the major companies they are involved with could be a great resource towards growing a green economy for everyone; and unfortunately the number of engaging funds is still relatively low. We could also stand to educate the citizenry more on finances and the impact of things like super-majority requirements so that these things that effect the democratic nature of companies can be discussed a bit more in the democratic processes we have available to us.

    Another way to approach this is through the consulting community already engaged with large corporations. I have to admit that the work Saatchi S did with WalMart made me suspicious at first; but in a relatively short time they made some good headway. If such work can be continued and normalized into other outside-in relationships, then that could be an effective means to a more cooperative solution (not to say competitive isn’t valuable and absolutely needed, but I’m concerned that a competitive approach will mostly build a green economy for all that already agree.)

  4. It’s actually a nice and useful piece of info. I am happy that you simply shared this helpful information with us. Please keep us up to date like this. Thanks for sharing.

  5. Building wealth in the times we are in is definitely a hard thing to do. Many have tried and failed and others have succeeded greatly. With the right information and proper amount of work all things can become possible.

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