Preventing the Fall of Rome

Why transformative change to the economic system is needed and how it might be accomplished.

by Gar Alperovitz

Although public ownership is surprisingly widespread, it can also be vulnerable to challenge. The fiscal crisis, and conservative resistance to raising taxes, has led some mayors and governors to sell off public assets. In Indiana, Governor Mitch Daniels sold the Indiana Toll Road to Spanish and Australian investors. In Chicago, then-Mayor Richard Daley privatized parking meters and toll collection on the Chicago Skyway and even proposed selling off recycling collection, equipment maintenance, and the annual “Taste of Chicago” festival.(Photo by Tony Case)
How far continuing financial and political pressures may lead other officials to attempt to secure revenues by selling off public assets is an open question. Public resistance to such strategies, although less widely publicized, has been surprisingly strong in many areas. Toll road sales have been held up in Pennsylvania and New Jersey, and newly elected Chicago Mayor Rahm Emanuel recently voiced his opposition to an attempt to privatize Midway Airport as previously attempted by Daley. An effort to transfer city-owned parking garages to private ownership in Los Angeles also failed when residents and business leaders realized parking rates would spike if the deal went through.
One thing is certain: traditional liberalism, dependent on expensive federal policies and strong labor unions, is moribund. The government no longer has much capacity to use progressive taxation to achieve the goal of equity or to regulate corporations effectively. Congressional deadlocks on such matters are the rule, not the exception. At the same time, ongoing economic stagnation or mild upturns followed by further decay, and “real” unemployment rates in the 15 percent to 16 percent range appear more likely than a return to booming economic times.

A Rasmussen poll reported that Americans under thirty were “essentially evenly divided” as to whether they preferred “capitalism” or “socialism.” Even if many were unsure about what “socialism” is, they were clearly open to something new, whatever it might be called.

Ironically, this grim new order may open the way for the kinds of “evolutionary reconstructive” institutional change described here. Since the Great Depression, liberal activists and policy makers have implicitly assumed they were providing one or another form of “countervailing power” against large corporations. But institutional reconstruction aims either to weaken or displace corporate power. Strategies like anti-trust or efforts to “break up” big banks aim to weaken. Public banking, municipal utilities, and single-payer health plans attempt to displace privately owned companies. At the same time, community-based enterprises offer public officials alternatives to paying large tax-incentive bribes to big corporations.
Of course, “evolutionary reconstruction” might fail, as have most kinds of top-down national reform. The era of stalemate and decay might continue and worsen. Like ancient Rome, the United States could simply decline and fall, unable to address its social ills.
However, even during a sustained era of stalemate and decay, it may be possible to develop a coherent long-term progressive strategic direction. Such a direction would build upon the remaining energies of traditional liberal reform, animated over time by new populist anger and movements aimed at confronting corporate power, the extreme concentration of income, failing public services, the ecological crisis, and military adventurism. And it would explicitly advocate the construction of new institutions run by people committed to developing an expansively democratic polity, thereby giving political voice to the new constituencies emerging alongside the new developments at the same time it helps to begin altering underlying institutional power balances
In connection with environmental issues, at least, some “capitalists” also seem willing to sign onto this vision. New organizations like the Business Alliance for Local Living Economies (BALLE) and the American Sustainable Business Council (ASBC) have been quietly developing momentum in recent years. BALLE, which has more than 22,000 small business members, works to promote sustainable local community development. ASBC (which includes BALLE as a member) is an advocacy and lobbying effort that involves more than 150,000 business professionals and 30 separate business organizations committed to sustainability. Leading White House figures and such Cabinet-level officials as Labor Secretary Hilda Solis have welcomed the organization as a counter to the national Chamber of Commerce. (Jeffrey Hollender, chair of ASBC’s Business Leadership Council and former CEO of Seventh Generation, has denounced the Chamber for “fighting democracy and destroying America’s economic future” because of its opposition to climate change legislation and its support for the Citizens United decision.) Gus Speth, a member of ASBC’s Advisory Board (and former environmental adviser to Presidents Carter and Clinton) offers a more far-reaching general perspective: “For the most part, we have worked within this current system of political economy, but working within the system will not succeed in the end when what is needed is transformative change in the system itself.”

A coherent long-term progressive strategic direction would build upon the remaining energies of traditional liberal reform, animated over time by new populist anger and movements aimed at confronting corporate power, the extreme concentration of income, failing public services, the ecological crisis, and military adventurism.

At the heart of the spectrum of emerging institutional change is the traditional radical principle that the ownership of capital should be subject to democratic control. In a nation where one percent of the population owns nearly as much wealth as the entire bottom half of the nation, this principle may be particularly appealing to the young—the people who will shape the next political era.
In 2009, even as Republicans assailed President Obama and his liberal allies as immoral “socialists,” a Rasmussen poll reported that Americans under thirty were “essentially evenly divided” as to whether they preferred “capitalism” or “socialism.” Even if many were unsure about what “socialism” is, they were clearly open to something new, whatever it might be called. A non-statist, community-building, institution-changing, democratizing strategy might well capture their imagination and channel their desire to heal the world. It is surely a positive direction to pursue.
Just possibly, it could open the way to an era of true progressive renewal, even one day perhaps step-by-step systemic change or the kind of unexpected, explosive, movement-building power evidenced in the “Arab Spring” and, historically, in our own civil rights, feminist, and other great movements.
This is the third post in a series of three. Click to read Part One and Part Two.
YES! Magazine Editor’s Note: In this series, leading cooperative theorist Gar Alperovitz details the ways collaborative ownership will revolutionize our society. (Check out his thoughts on transforming the banking system, and on health care, jobs, and community development).

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Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative. Among his most recent books are America Beyond Capitalism and (with Lew Daly) Unjust Deserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back.