Welcome to the spring of sequester and discontent. Just ahead, whatever happens in the world of politics, a world of people are going to experience yet more cuts to education, housing, healthcare, and there's no solution to poverty in sight. Even for those who were flushed with excitement last November, the new term is already feeling like a pretty glum place. What real change is likely to come? Probably not much. By how much are real wages going to grow? Probably less. "If you counted poverty the way every other nation in the world counts it, a quarter of our society is in poverty," says political economist Gar Alperovitz.
So why is it then, that Alperovitz also says we may be witnessing the prehistory of the next American Revolution? What's up?
Alperovitz believes that the storm of failure we're witnessing creates crisis but also possibility. When states and cities have "no answers," new ideas and new experiences have a chance to insert themselves into the mix. Indeed, look a little deeper than the money media tend to, and the US economy is pretty heterodox. Far from one "economy" we live in a "checkerboard" of systems, some of which look a whole lot like socialism.
What's "hotel socialism"? Find out in this conversation about Alperovitz's latest book What Then Must We Do: Straight Talk About the Next American Revolution, which comes out later this month from Chelsea Green. Alperovitz teaches at the University of Maryland. We talked for GRITtv.
Laura Flanders: Am I describing this moment correctly? Post-election enthusiasm followed by gathering gloom?
Gar Alperovitz: I think that's about right and rightly so. The president is committed to $1.5 trillion in cuts for the next decade and at the same time he is talking about boosting the economy. I suspect we'll get very little change in the unemployment rate [that is] the real unemployment rate, which is probably 15% if you count the people who just don't show up anymore.
What are the main accomplishments of Obama's first term in your view?
The obvious accomplishment, such as it is, is Obamacare. With great buy-offs of the corporations and insurance companies, we got some people more healthcare. A very lousy deal, but nonetheless, people who would not get it are there and possibly that will force states to move in the direction of Vermont - to single-payer. Otherwise, the cost is just too high. So that's a step in the right direction, taken badly but nonetheless.
But it's a great case in point. The reality seeps through. Reporting recently on the slower than anticipated rise in healthcare costs [a front page story in the New York Times played up the good news for the administration], but look at the data, and the slowing rate of growth is probably because of the recession: People are going to the doctor less often.
It is a reduction in the rate of growth. The cost is still going up and the cost structure is not sustainable.
Now I look at this wearing two hats: I am a historian and political economist. When I say "the revolution" I mean we are entering an era like the Progressive Era, when at the end of the 19th century in the next two or three decades problems get worse. The political system can't solve the basic problems. That produces the kind of developing reactions we're seeing both in terms of protest but also in the many states and localities. The press doesn't have any interest in, and doesn't have any reporters who can cover it covering it, but there is a lot going on because the pain levels are growing at the local levels.
People who are invested in Wall Street and the stock market would say, "You're mad, the market is up. We're doing great."
Absolutely, at that level the elites and the markets are doing very well. As they are doing well, many, many tens of millions of people are not doing well. We're about to see a major crisis [among] the elderly because very few people have savings for retirement and the pain levels are going to grow there, which means their kids are going to be under pressure and that's another source of difficulty.
The main thing is to look at long trends, and there is decay over 30 years in terms of income distribution, climate change, environment, poverty. If you counted poverty the way every other nation in the world counts it, a quarter of our society is in poverty - that's to say, living on less than half of the median income. There is an underlying decay in the political system that our system can't handle, and bound to come with that are both political protests …
Much more interesting are the changes in the institutions, worker-owned co-ops, neighborhood ownership. Changes are happening in the ownership of capital in many parts of the country. Ten million Americans are working in worker-owned companies; 130 million belong to co-ops of one kind of another. These are changes going to the question of who owns the capital, which is the key question in any sort of capitalist system. And I think that's going to build out of the decay and out of the pain.
Let's start with some examples; when you say there are examples, name a few.
The most interesting one is in Cleveland, the Evergreen Co-ops. A group of worker-owned co-ops brought together with a nonprofit corporation so that they build community, not just individual worker co-ops and a revolving fund modeled after Mondragon co-ops in Spain; so they kick back to the revolving fund to build more worker co-ops. That's the complex; they have three or four on the ground right now, including the largest urban greenhouse in the United States producing three million heads of lettuce a year. That means every Monday and every Tuesday, and every Wednesday 26,000 heads of lettuce are put to seed. It's a very big operation.
And the people overseeing the greenhouse are workers, members of the community?
It's a joint venture. The workers have participation and control in their co-ops, but they aren't free-ranging. They can't get up and go; it's a community building operation. The distinction that is even more interesting, [there's] a lot of taxpayer money in hospitals and universities. The big hospitals and universities in that area have been brought in to purchase from this complex. They buy three billion dollars a year in goods and services.
So you have the political sphere actually investing in this experiment or in this new type of enterprise.
Yes, and several other cities are doing something very similar: Atlanta, Pittsburg. A number of cities are exploring it now, which tells you - and this is the paradigm - there is no answer in most urban areas for redeveloping low-income areas. Corporations aren't going to do it, small business isn't going to do it, the government doesn't have any money ...
That logic - "no answer" - is forcing innovation and that's the paradigm logic of this decade and the next decade that gives me some hope that we are laying the groundwork for something that could get beyond [what we know now].
There's some history here that you write about in this book, and because I covered it a bit last year I want you to mention it for our audience. That's the history of the Youngstown, Ohio, steelworks and what steelworkers have done in the last year that's very different from 30 years ago.
I was involved, in 1977 … One of the first big steel mills to go down was Youngstown Sheet and Tube in Youngstown, Ohio. Five thousand people lost their jobs in one day. They were all pink-slipped. It was traumatic, and they got together with a religious coalition and put together a plan … which was a worker community ownership of a large mill, and they got enough financing to finance a very sophisticated technical plan. They put it together, the Carter administration was going to support it for 100 million dollars and somehow, and somehow not surprisingly, that disappeared. The Steelworkers Union International was against these local guys at that point and time. They didn't want anybody messing with ownership and they didn't want these upstart guys challenging their leadership.
That's all changed radically. Now steelworkers are leading the fight to produce worker-run co-ops with unions built right into them and they're leading that shift within part of the labor movement. Again, viewing this historically, this is another sign of the change that I'm talking about: not only problems that can't be solved but an evolution of ideas and institutions beginning to realize they have to move in new directions. The steelworkers are a large union. When they move, they can actually move a lot of capital into doing this and I think they will.
One of the interesting things the book describes is the dominant economic system - it's not as dominant or hegemonic as you might think. You mention some extraordinary examples. The Texas Permanent School Fund … Talk about that.
If you get below the abstraction "we can't do it," you find something different actually going on. In Texas for almost 100 years they had land in ownership of the state and oil in ownership of the state
Doesn't that sound like "nationalized"?
… Socialism! Land and the profits from this publicly-owned trust are used to fund education. That is socialism.
If you told most Texans that's what's happening in their state they'd say …
They'd probably say it's a good thing because it's Texan and they don't see it through the idea of socialism, they see it as a good thing for our state. Indeed, if you look around - the point of this book - you find these kinds of things. Seven hundred and fifty cities are setting up companies to capture methane from the garbage and turn it into electricity, to make money and to create jobs.
Again, if you actually get beyond the big abstractions ["socialism"] the problems cannot be solved in other ways and there are these innovations going on at the grassroots level. I'm a realist, this is all preliminary stuff. Nonetheless, they are introducing into American culture and ideology the idea of democratizing the ownership of wealth in real human terms that people can understand and that has very powerful potential in terms of cracking the ideological sphere. It's Gramscian, if you like.
Public banking is a part of this too …
Yes. The Bank of North Dakota, as many people know, is a bank that has been there for ninety years. It's a state-owned bank, very popular among small business but also labor. Some 20 states have introduced legislation to replicate something like the Bank of North Dakota. Washington State and Oregon are the furthest along, but again, as the financial crisis comes and goes, I think we are going to see more support.
It's a very interesting sub-rosa movement that's growing around these kinds of things. Banking is another area where you're beginning to see this kind of exploring of public ownership - exploring democratizing wealth. That's what distinguishes this from the traditional liberalism [of] "let the bankers own it, let the investors own it, and let government try to regulate." These paradigms all involve democratizing ownership in what's also a very American way, a very decentralized way.
Calling it the next "American" revolution gets to that point. What we've known as the liberal model is essentially the European model: liberalism as a check on the banks and on the concentration of power. That's the idea of "countervailing" power: You have the Chamber of Commerce, we'll have the AFL-CIO, a balance of forces. That's not what you're talking about.
That word "countervailing power" came from John Kenneth Galbraith, who believed in it but near the end of his life said, "that's over." He was right because mainly he had in mind labor unions. They went from 35% of the labor force organized, now down to 11% [in the public] and less than 7% in the private sector today. That force is not able to "countervail." Let's do what we can, I'm for labor, but they have declined dramatically. Take Vermont. They are going to have single-payer healthcare shortly, because the election gives them that power, and when they do they will displace other companies because they will have better prices and the service will be better.
Public banking, putting in a bank that people like, you are creating a displacement movement rather than simply countervailing, and a true transformation is going to have to transform who owns capital, and how institutions are organized …
Again if you see it historically rather than it's going to happen tomorrow you can see this buildup over many parts of the country, which gives us a shot, at least, at thinking about building over time different sorts of political movements and at the same time thinking about different institutions rather than the old idea of let them own the wealth and we'll try to countervail or beg, one or the other.
I talked with economist Rick Wolff not long ago and he said a lot of people can make a co-op without changing the power relations of the state. If you just change that the workers own something but the structures of the business stays the same, have you really changed anything?
I totally agree. I think this is the prehistory. We are introducing into American consciousness the idea that it's important to change the ownership of wealth and the experience and practice of doing that. That is only step one. It has to have a politics that begins to generalize that [and there have to be ideas].
This is often left out of organizing, the Gramscian notion of ideas. The second part of the battle is also to introduce new ideas. What this is about in the big terms is changing ownership of capital and democratizing wealth (or the sociology of knowledge, as per Karl Meinheim's argument.) We are building the practical basis of an idea system that needs to be raised, too, even among progressives who don't see it that way. They still for the most part are involved with let's protest and get them to give us something, I'm not against that; there is a lot of work to do on that front. But we are also going to need practical examples, an idea system, and a political movement. The idea system is often neglected. I write books and I don't think ideas matter most of the time - because power matters. But when the idea system is collapsing and people don't believe the old stuff anymore. Then it's important to clarify a new direction and why … Ideas can become very practical.
We believe in ideas here at GRITtv…. Speaking of which, Hurricane Sandy [caused devastation across many Eastern states and people are actively seeking ideas about how to rebuild and how to recover]. If you had your way, how would you do it? If you had a chance to model a community according to what you call a "checkerboard" of possibilities, how would you do it?
Checkerboard is interesting. There are some states where you can't do much at all … and some states like much of New England and New York - you can do quite a lot. I would begin with all of the practical stuff that's happening and say why don't we do it all in one place. Why don't we put in place a public bank, serious worker-owned co-ops linked together in the way that this Cleveland effort is (by the way, Cleveland efforts are all green, top of the line). I would get serious about working with the rest of the region. This is a big country and regions are going to be a big part of this. The Northeast is furthest along in trying to set up alternative structures. So those would be the elements: changing the ownership, putting in place a financial system, building a green structure and looking to regionalism and to models that are already on the ground. Simultaneously, you've got the ideas system. Let's talk about the future in a different way … If we're serious about this, it's a process over decades, and what we have the chance to do in our lifetime is of laying down the groundwork, as the failures continue, of something transformative.
What's hotel socialism?
Again, if you peek below the surface, many, many cities are in the business of owning hotels and public utilities. This is all public municipal socialism. The municipalities develop highly profitable land around highway exits or subways; they used to do the development and give the profits to the private sector and tax it back. They're not doing that any more. The cities own it now and get the profits … Twenty five percent of American electricity is produced in co-ops and public utilities.
And the money goes back to public coffers?
Right back to the public. It's socialism if you like. Real socialism, not what they claim Obama is doing. It's actual ownership of the means of production.
What can people do if they say I don't want to have that kind of responsibility over my workplace? I just want to go in, do my 9-5, be told what to do and leave?
Relax. People tend to think you've got to participate. That's fine, too. That's another way to deal with a very affluent system ... People ought to have that choice. This country today, we do not have an economic problem. How can I say that? If you divided the current lousy economy up, it's about $200,000 for every family of four today even in the horrible economic mess we're in. We have a political problem of how to manage the richest economy in the world and that's what we're talking about - how do we change the power that controls that economy?
Can I take the $100,000 and work less hard?
You got it: Split the work week in half and you have a 20-hour work week!
Gar Alperovitz's What Then Must We Do: Straight Talk About the Next American Revolution comes out this month from Chelsea Green. For more on co-ops, check out Yes Magazine: the spring issue, on How Cooperatives are Driving the New Economy is just out.