PCDForum Column #52,  Release Date June 25, 1993

by Gar Alperovitz

When world leaders meet to discuss the global economic crisis, their focus
of attention on international exchange rates, central bank lending policies,
trade barriers, and international investment flows seems far removed from the
concerns of most of the world’s people and communities. Indeed, people of all
nationalities increasingly sense a wide gap between their own concerns and those
of the political classes that meet in Geneva, Washington, and Tokyo to manage
the global economy. It is a gap attributable to the institutionalized power of
wealth and the dominant influence of big corporations. This gap is producing
human inequity on a vast scale, strengthening power relationships inimical to
meaningful democracy, and actively preventing us from building the kind of
societies we want.

The practice of democracy as a living form of community must foster
substantial equality, nurturing the capacity in every citizen to affect the
governing decisions that determine the fate and shape of the society in which
they live. The concept of one person – one vote clearly does not go far enough
in providing this equality. Indeed, even in many Western democracies, and
especially in the United States, the conditions for a “living democracy”
are weak and fading as capitalism generates an extraordinary degree of

For most of the twentieth century, the progressive vision of the future has
centered on the socialist idea that equality and democracy can best be achieved
by a system in which ownership of society’s wealth is vested in a structure,
usually the state, beholden to and controlled by society. Now the traditional
socialist ideal has collapsed, along with its distant cousin the liberal welfare

Fortunately, there is a structural alternative to both the socialist
solution of state ownership and the capitalist solution of large corporate
ownership. That option is an economy built on community-based ownership through
such mechanisms as small-scale co-ops, worker-owned firms, and neighborhood and
municipal corporations.

Many successful examples are found in United States, where thousands of
grassroots enterprises economically empower American workers and communities.
They are led neither by policy elites in Washington nor by financial elites on
Wall Street, but rather by civic-minded entrepreneurs, innovative labor unions
and effective local governments. Such initiatives, found in many countries,
collectively offer the beginnings of a fundamental economic restructuring.

I’m not talking of a few isolated examples. In the United States alone,
there are now hundreds of worker-owned firms. At Weirton Steel in Pennsylvania,
the company is 77 percent employee-owned with 8,000 men and women participating.
At City Pride Bakery in Pittsburgh, a coalition of religious, labor and
community organizations helped former employees raise 12.6 million from public
and private investors to reopen after a major shutdown. Avis Inc. was purchased
by its employees in 1987 for $1.75 billion, making it one of the largest
worker-owned firms it the country. Worker-owned plywood firms in the Pacific
Northwest account for more than 10 percent of all production in recent years.
Using a broad definition that includes all forms of employee stock-ownership
plans, the number of firms now experimenting with worker-ownership approaches
10,000. They involve perhaps 12 million people–more than the entire membership
of private-sector trade unions in the United States.

The United States also has more than 30,000 co-ops, including 4,000 consumer
goods co-ops, 13,000 credit unions, nearly 100 cooperative banks and more than
100 cooperative insurance companies. Add to this 1,200 rural utilities and
nearly 5,000 housing co-ops, plus another 115 telecommunication and cable

Less well known but equally important are numerous community owned cable
systems, hotels, fertilizer manufacturing companies, towing services, real
estate development efforts and even professional sports teams. Supplementing
this list are thousands of efficiently run city-owned electric utilities. At the
state level, examples range from the 75-year old state bank of North Dakota to
the state-owned insurance company in Wisconsin.

These practical alternatives demonstrate the creative capacity of an
industrialized citizenry motivated to restructure their economic reality.
Workers and communities have developed new structures to reestablish control
over the quality of their lives. Such developments as described above could
provide the foundation for the beginnings of a new form of democratized
political-economic system one different in moral and human meaning from both
traditional capitalism and traditional socialism. It is this system, rather than
the system of transnational capital, that international, national, and local
policy should be encouraging.

Gar Alperovitz is president of the National Center for Economic
Alternatives, a fellow of the Institute for Policy Studies, and a contributing
editor of the People-Centered Development Forum. This column was prepared and
distributed by the PCDForum based on a number of his articles. His address is
3217 Ashmead Place, NW, Washington, DC 20009. Fax (202) 986-7938.

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