Building solidarity economies from the ground up – democratic land, labor & money

I’m going to sketch out here a vision for building liberatory grassroots power grounded in solidarity economies, a practice of alternative democratic political economy that movements led by indigenous and poor and working-class people in Latin America began to develop in mid-1980s Latin America in order to resist and begin to build alternatives to neoliberal capitalism being imposed by Global North countries through the International Monetary Fund (IMF) and World Bank (see Marta Harnecker’s A World To Build: New Paths Toward Twenty-First Century Socialism and Ethan Miller’s article Other Economies Are Possible). These movements have built upon centuries of human practices of mutual aid – I just want to acknowledge the origins of their current iterations in the Global South and in the resistance to US and Global North power. Today, Movements around the world – the Zapatistas in Mexico; the municipalists in cities like Barcelona and Jackson, Mississippi; and the democratic confederalists of Rojava– are leading the way on building local solidarity economies that prioritize production for human need over profit.

Solidarity economies are rooted in direct democracy, community power, and local control of economic institutions. They include and build upon many of the ideas in the Movement for Black Lives’ ‘A Vision for Black Lives’ and the Black Youth project 100’s ‘Agenda to Build Black Futures.’ Solidarity economies are built around local and democratically controlled institutions that own and control land, labor, and money. Land banks allow communities to democratically (re)distribute land, and community land trusts facilitate community ownership and control of land. Cooperatives create democratic ownership and control of productive capital and workspaces. And public, city-owned banks can coordinate with one another to produce the money needed to finance production for human need.

Solidarity economies seek to displace the status quo political economy in which very few of us own everything — the 500 corporations of the Fortune 500 account for around two-thirds of our annual GDP and the 42 wealthiest people in the world own as much wealth as 3.7 billion least wealthy people. The small group of people who own the economy possess extreme power over the rest of us: they make the investment decisions that determine how everything we need in order to live will be produced, whether or not people will have affordable access to these goods and services, what jobs will exist, where jobs will exist, whether the planet we live on will continue to be able to support human life, and so on. Whoever is empowered to make these decisions governs any given society, irrespective of the structure of its government and other institutions. If we, in the US and around the world, aspire to be democratic societies, I think we need to democratize these decisions. 

Humanity possesses the abundance necessary for every person to have everything they require in order to live with material freedom and dignity.

The local level – imagining and experiencing a transformed political economy

I think building institutions that place power as close to the grassroots level as possible is important for a couple of reasons.

First, the local level is the scale at which it is most possible for us to create the building blocks of what Angela Davis describes as an abolition democracy, a society in which we have abolished the institutions that advance the dominance of any one group over another. The local level is where we can create the in-person spaces through which we can transform our relationships to ourselves and one another and learn to practice participatory democracy together. Lived experience with participatory and egalitarian (anti-racist and anti-patriarchal) culture can expand our political and social imaginations, providing paths for people to learn how to practice, and to prefigure, the egalitarian and participatory ideals of the system that we seek to build.

Second, the local level offers concrete paths for building power. Creating local institutions both demonstrates proof of concept, which can help people imagine and believe in the different world we are trying to build. Creating local institutions can also help us consolidate resources that we can use to build bigger institutions. As Mahatma Gandhi argued with his conception of the constructive program, a society is built through the process of building a society. Through building local democratic institutions together, we can develop the capacity to act collectively and to practice democracy with one another. Additionally, emphasis on the local level allows organizers to start small and to turn small gains – the creation of one local institution or a network of local institutions – into a base from which to expand and to create more institutions. Building power in this bottom-up, cumulative manner is also similar to Antonio Gramsci’s vision of the war of position, in its emphasis on local, winnable projects avoids the zero-sum contests that can crush movements before they are ready to win big. Organizing in this way, in other words, allows for gains to be won before everything is won and for the gains to be mobilized toward further transformation.

Third, as the democratic municipalists in Jackson, Mississippi and throughout Spain argue, democracy is more possible at local levels. Democratic decision-making can be more participatory at smaller scales, and elected representatives can be more directly held accountable at smaller scales. However, the reality is that many people must coordinate across large spaces (the entire planet) in order to produce all of the things that we need in order to live.

Building confederated structures (power from the ground up)

To address this mismatch between democracy being more possible at local levels and the need for many people to coordinate across large spaces, movements building solidarity economy institutions advocate that the principle of subsidiarity guide the creation of regional, national, and international institutions through which more local institutions can coordinate with one another. The principle of subsidiarity – the basis for the model for a confederated democracy comprised of local democratic institutions that the Kurds are building in the Rojava region of Syria – holds that institutions beyond the local level should only be formed when they are required to achieve goals that cannot be achieved at smaller scale or are better achieved at larger scale. 

Currently, I believe power is held primarily in national institutions. We can organize to elect politicians at the city, state and federal levels who can work together to push power toward the local level, which can allow us to recreate our democracy at a scale that allows for popular power. It is far easier for corporate elites to control centralized federal institutions than it is for them to control empowered city- and state-level institutions. Federal and state governments can push power to more local levels by creating space for local policy power. Officials can eliminate barriers to local economic democracy by supporting initiatives like California’s defeated Proposition 10, which would have overturned the state law that prevents cities from passing their own rent control laws. Similar laws, including community benefit agreements and responsible banking ordinances, can curb the most predatory corporate practices and create more space for the development of solidarity economy institutions at the local level.

Federal and state officials can also drive resources to local solidarity economy institutions. One way to do this is by creating new automatic spending programs that prioritize solidarity economy institutions like a Green New Deal or significant increases in spending on affordable housing and public infrastructure. Another way is for government contracts at all levels to prioritize solidarity economy institutions. Under the status quolarge corporations receive overwhelming percentages of the hundreds of billions of dollars of contracts that government at all levels awards each year. By directing resources to local solidarity economy institutions, progressive politicians can make us less dependent on elections, as solidarity economy institutions can become self-sustaining institutions that become a base for building progressive power. Solidarity economy institutions are democratic institutions themselves and can function as their own independent spheres of democracy that work together as elements of a larger, bottom-up democratic society.

Land, labor and money

I take inspiration from the Karl Polanyi’s argument that the fictitious commodification of labor, land, and money has made human society an accessory of the economic system. Land, labor and money are the basis for material life on this planet. Within the status quo land, labor and money have been made to take capitalist form. To create solidarity economies, I think we will need to figure out how to give land, labor and money democratic form.

Democratic land

With respect to creating democratic ownership and control of lan, a land-value sales tax can decommodify land, stopping the engine that drives gentrification, and land banks and community land trusts (CLTs) can be used to redistribute land and to create ongoing democratic ownership and control of land. A land-value sales tax, argued for by the economist Henry George over a century ago, could decommodify land by taxing 100 percent of any gain on the sale of land at the point of sale. A land-value sales tax could be made law at any level of government and would apply to the land located in that level of government’s jurisdiction. Rather than raising revenue, such a tax would likely discourage investors from treating land as a financial commodity because, under a land-value sales tax system, an investor could only sell land for a price that recovers their investment — any profit is taxed away. Eliminating land as a vehicle for financial speculation — which benefits primarily, if not exclusively, landowners — removes the main tool through which landowners control land use and can clear the way for a system of land use that reflects more closely human needs, including housing, enjoyment and use for production of goods and services.

We can then use land banks and CLTs in order to create a new democratic system for owning and controlling land, as opposed to the current landowner-controlled system. I think that land banks and CLTs are best situated at the city level and below, where they can be more easily democratically governed, though federal and state governments can advance them by explicitly authorizing their authority and by directing to them new and existing federal and state spending programs. Land banks can be authorized to acquire — at market or below-market prices — government-owned land, tax delinquent land and land left unused by absentee landlords. Land banks can transfer this land to community land trusts that are democratically governed by people who live near and use the land so that communities can prioritize land use that fits their needs. We can then create a bottom-up system for coordinating land ownership and use policies across cities, states and regions through confederations of local land banks and CLTs that could effectively act as legislatures that focus exclusively on issues of land ownership and use.

Movement groups around the country are already building land banks and CLTs. Politicians at all levels of government should amplify these efforts and drive resources to them. In Boston, the Dudley Street Neighborhood Initiative operates a community land trust that has turned vacant land, acquired in part through eminent domain authority obtained from the City of Boston, into 225 affordable homes and extensive public community space, including a community greenhouse and an urban farm. The Baltimore Housing Roundtable has developed, and is organizing around its “20/20 New Vision for Development,” which calls for an annual city commitment of $40 million — $20 million for jobs for city residents to deconstruct vacant buildings and lots, and $20 million for creating a community-controlled housing sector, which emphasizes use of community land trusts. The plan also includes creating a land bank to be used by community groups in order to transfer title of vacant and underutilized properties to community land trusts. In Philadelphia, an activist group, Campaign to Take Back the Land, successfully organized to pressure the city council to create the Philadelphia Land Bank in December 2013. The group is trying to pressure the city to use the land bank to take ownership of and transfer vacant properties to community land trusts.

Democratic labor (ownership and control of production)

With respect to democracy in the workplace, cooperatives provide rights to governance to all members — workers, community members or some combination of both — on a one person, one vote basis. Profits, or what cooperatives call “surplus,” are typically distributed to member-owners in proportion to the amount of work they put in to the business. Cooperatives with different member groups take different forms; popular forms include worker cooperativesconsumer cooperatives and producer cooperatives. Cooperative practices concerning governance and surplus-sharing are far different than those of modern corporations, which provide rights to profit and governance exclusively to the financial investors who purchase the corporation’s equity.

People all around the US are already hard at work building worker cooperatives, and some city governments have begun to support their development. Politicians at all levels of government should amplify these efforts by highlighting local organizing and by directing resources to these efforts through public contracts and new public spending programs. Cooperative Home Care Associates (CHCA), a home health care business based in the Bronx in New York City, is the largest worker cooperative in the US. The CHCA is owned by 1,100 worker-owners, over 90 percent of whom are women of color. Its workers earn wages and benefits double the industry standard, and its CEO-to-minimum-wage-worker peaked at 11:1 in 2006, while the CEO-to-minimum-wage-worker ratio in the larger economy is somewhere between 296:1 and 373:1. Coalitions of movement organizations in many cities, including Jackson, MississippiNew York CityPhiladelphiaChicagoCleveland; and the San Francisco Bay Area are at various stages of building city-level plans for worker cooperative development. In New York City, the city government increased its annual budget spending toward worker cooperative development, through its Worker Cooperative Business Development Initiative, to $3.048 million for 2018, up from $1.2 million during the program’s inaugural year in 2015.

Democratic money

The solidarity economy vision aims to create a banking system comprised of city-owned banks subject to local democratic control. Public banks exist in countries throughout the world, including India, Japan, Germany, Canada, New Zealand, and many others. 

Public bank control of the system for creating money would significantly change the process by which money is created and allocated for use. By allowing investor-owned banks to create money, the government effectively allows investor-owned banks to privatize the public good of money creation. With local democratic control of money creation, people can also more easily organize to prioritize allocating money to people who have historically been excluded from accessing the land and other material goods that they have needed in order to live with dignity, among them, Indigenous people, people of color, women and LGBTQ people. It could also democratize decisions about who banks should serve and how they do so. City-owned public banks can coordinate to allocate creation of the economy’s money. They can finance targeted investment programs like a Green New Deal to create a just transition to a renewable energy economy, and, more generally, they can finance production of life necessities. 

Precedent exists within the US context for public bank control of money creation.

North Dakota established our country’s only state-owned bank in 1919. The Bank of North Dakota deposits the $6 billion of state tax collections and federal transfer payments it receives annually in the state-owned bank, which then re-deposits the funds in credit unions and community banks throughout the state. The bank currently has close to $7 billion in assets, and over the last 21 years, it has generated nearly $1 billion in profit for the state, $400 million of which has been transferred into the state’s general fund, reducing the tax burden for state citizens and providing support for education and other public services. Not unrelated, the state has the most locally-owned banks per capita and maintains a low unemployment level relative to other states. The key element of North Dakota’s state-owned bank is that the value of the money it creates is backed by the state’s full faith and credit.

The Reconstruction Finance Corporation (RFC) offers another historical precedent. The RFC financed the New Deal without using any tax revenue and without any spending appropriation from Congress. Congress created by statute the RFC, which issued bonds that the Treasury Department purchased with money that it created – the process was very similar to the Federal Reserve’s policy of quantitative easing, through which it created trillions of dollars from nothing in order to purchase toxic mortgage-backed securities from the big banks in an attempt to restart bank lending in the aftermath of the 2008 financial crisis. The RFC borrowed over $51.3 trillion from the Treasury and a little over $1 billion through bonds sold to the public, and it used this money to spend for public purposes. A similar model could help answer persistent questions about how to pay for the Green New Deal. With the creation of public banks, we can again create the capacity for money creation for public purposes.

Using elections and government to build solidarity economies

Movements can create economic democracy through solidarity economy institutions that displace corporate institutions. We can pressure politicians at all levels of government to support solidarity economy institutions. We can use elections to popularize economic democracy ideas and policies, and we can use public spending and government contracts to create financially sustainable solidarity economy institutions that are themselves democratic and independent from political parties. These institutions can become a strong base for popular liberatory power through which we can deliberately displace corporate economic power and move toward economic democracy.

Solidarity economy building as an international project

This is getting beyond what I can explore here – or craft at the end of this long day. I just want to acknowledge briefly that capitalism is an international system and that we must build international solidarity economies in order to displace that system.

“Free trade” is the modern form that imperialism takes: It is a system that protects and expands inequalities of power both between and within countries. “Free trade” empowers global North multinational corporations to continue — with minimal interference and tacit approval from global South governments — the unequal trade they developed with the global South during colonialism. Further, it allows global North multinationals (with their junior partners, global South multinationals) to increase inequality around the world by pitting working class people in the global North and global South against one another.

We can seek to link solidarity economies throughout the world in order to begin to shift wealth and political power to the grassroots masses and away from multinational corporations and the governments who work for them. We can begin to build bottom-up democratic international institutions. We can use national government policy to help expand solidarity economies throughout the world in many ways. We can pressure governments to shift their purchasing power to cooperatives and away from the small number of large corporations that currently receive most public contracts. Governments at any level could take more aggressive measures and cease recognizing investor-owned corporations, which are not democratic institutions. Instead, governments could require businesses that want the privileges that come with incorporation — including limited liability protections — to operate as cooperatives with rights for workers, and perhaps surrounding communities, to decision-making and profits. Locally rooted solidarity economies throughout the world can work together to build the bottom-up democratic international institutions through which we can finance solutions to collective problems and through which we can coordinate the production of all the goods and services that everyone needs to live dignified and free lives.

Published by Geoff Gilbert

I am an organizer, writer, and lawyer working toward social justice and trying to help create political and economic democracy. I work as an attorney with The Working World.

2 thoughts on “Building solidarity economies from the ground up – democratic land, labor & money

  1. Geoff, what a great post outlining the elements of a truly shared economy! I have been investing in many of these models for years. The nagging question i have is how do we increase them? You suggest public policy ideas at the various levels of government to get resources, which means we must also increase community organizing efforts. How do we get the message to people in our communities? How do we get these ideas communicated so more people know about them? How do we get these models taught in the business schools? How do we get them to be “popular” rather than fringe ideas? How do we mobilize folks with a new vision? I belong to a group in Oakland that is trying to do that, hashtag is Land without landlords. How do we prepare for the backlash from current owners, those who profit from the current system? Any thoughts regarding how to keep institutions accountable and democratic? Thanks again for such an informative post.

    Like

  2. Geoff – with apologies for the timing of this post, I did feel compelled to let you know how much I appreciated you laying out the pieces to this shared ownership puzzle. The only way to move beyond the current broken system is to present a vision for the future.

    How does a power map inform how to get from here to the vision you have laid out? What are the next three tactics or relationships?

    What role do you play individually or institutionally?

    Like

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