Welcome. Pleased to have you here for this discussion with Gar Alpravitz. We've entitled this event, Democratizing Wealth and a Sustainable Future. And we came up with that because it's one of the subtitles of Gar's new book. And the full title evokes, let's see, Leo Tolstoy, Book of Luke, John McCain, The Do-It-Yourself Movement, as I read it, the DIY movement. It's called, What Then Must We Do? Straight talk about the next American Revolution, democratizing wealth and building a community, sustaining economy from the ground up. So a lot of ideas in there that we're going to hear about today from Gar. We invite you to join the conversation online at assetsnaf and you can use the hashtag, democratize wealth. So I've got, I know a live Twitter in the room and you can join us online as well. So it's really a pleasure to host Gar here at the New America Foundation. He's a big thinker, followed his work for years. I consider him a historian, a political economist, contemporary theorist. I don't know how you describe yourself, but these are all things that come to mind. He's a professor at the University of Maryland at College Park, but really someone who's interested in action and social change. And in that spirit, he was a founding principal of the Democracy Collaborative, which is a partnership committed to innovations in community development. And really for a long time has been engaged in a set of ideas that promote shared prosperity and ways that we can respond to some of the rising inequalities that have taken hold. He's also spent a great deal of time looking at the world and exploring what happens when we put ideas into action. What happens when we have policies that are designed for people and not corporations? What happens when employees become owners of their companies and when ownership spreads and when wealth is democratized? So here in the asset building program, we focus on developing policy ideas that help families with lower incomes and fewer resources access opportunities that help them move up the economic ladder and find some financial security over time. I strongly believe that it's savings and assets and wealth that play a special role. They open up opportunities, new avenues for people to kind of move up the ladder, but they also change the way people think and behave and orient toward the future. So democratizing capital is a theme I think is really one of the keys in developing a more inclusive economic system. So we need to be looking for ways to do this, to implement it, to include everybody, allowing people to reach their full potential. As Gar notes in his book, the challenges never before have so many people been frustrated with the current events of the economic system, fearful that it's not working for them. And I think this is also then an opportunity that I think he's interested in describing because people are open then to new ideas about how we can direct our economy and shape our society. So in his book, he presents this case in very clear and accessible language for democratizing wealth and promoting a sustainable future. And that's what he's going to talk about today. So we're going to bring him up here to give you the highlights of his book and his perspective. I'll ask him a few questions afterwards and then we'll have an extended discussion. So let me turn the podium over to Gar. Thank you. Thank you, Reed, and thanks to the asset program here and also to you folks in general for coming by. I'll give you a very quick sketch of this and then we'll get into conversations. This book is very accessible. It's written for a broad audience, but it is based upon an ongoing, much larger research project that we have at the Democracy Collaborative. So one way to begin this is just to tell you that I come out of, I used to run house and senate staffs and policy planning at the State Department for liberal senators and liberal congressmen, and I've been in that world and come from that world as well as the academic world at both Cambridge University and at Harvard. And I would have considered myself a progressive liberal economist at one point and in fact was. And about eight or ten years ago, maybe a little longer, I think I noticed with other people the decline of the capacity of that form of politics. And let me stress this, to alter trend, that the trends of income distribution, wealth distribution, ecological change, et cetera, were moving south and the reform capacities were inadequate to alter trend. And that's the beginning point of this book. The book argues that indeed the traditional model of corporate capitalism that we in many western European countries lived with was based in the political economy literature, and this is very strong, was based ultimately on an institutional capacity provided by labor unions associated with a political movement of progressive liberals in this country, social democrats in Europe, and the institution plus the movements were able to use Ken Galbraith's language to counter veil, tax, regulate, and manage the corporate system. And the literature on this is pretty clear. As labor has declined, and this is a radical shift in American politics from 34.5% of the labor force organized at its peak in 1954 down to roughly 11% now and 6.6% in the private sector, and declining, the first fundamental argument of the book is that whole politics that I come out of, and many in the room may share, is in decline and it is in radical decline and not likely to resume. And the evidence comes in the long trends. The distribution of income is worsening. The top 1% over 30 years has gone from 10% of the income to roughly 20% of the income. And CO2 production has gone over 30 years, gone up 30%. The incarceration rate, which is one people don't pay attention to, but ought to, has gone up the same rate. We are now seven or eight times as many per 100,000 in prisons in jails than any other advanced country, including Russia. So almost on income distribution, on wealth distribution, on climate change, there are long trends that suggest the incapacity of the traditional model to alter trend and a decaying pattern. That I also define as a systemic crisis, not a political crisis. Let me say what I mean by that. That the design of the system, corporate power, balanced by another institution, the labor union, is a systemic design. We think of it as ordinary, but it is in fact a systemic design other than pure corporate capitalism, other than 19th century small business capitalism, other than socialism. It was a way in the mid-20th century, I put on my historian's hat and urge you to as well, it was an interesting form of the middle part of the 20th century. That's a charring way to say that that system is in decline. And the trends reflect it. Most interestingly and most importantly, is the concentration of wealth, the basis of power in virtually all systems. And most people are aware that wealth is concentrated, but they don't often recognize that 400 individuals, this is a shocking number, hard to get your head around. You could probably get them in this room, have more wealth in the bottom 180 million people taken together. I often say that's a medieval concentration of wealth, but I've been corrected by medieval historians who say it's never been that concentrated in medieval times. It's very interesting. And to the extent systems are based upon in significant part the concentration of wealth, feudalism was land, the Soviet Union was the state, 19th century capitalism, small business, largely farmer businesses. And to the extent wealth is the basis of systems, that means we are entering an era in which the corporate system is overwhelmingly dominated and not counter veiled. So that's the bad news. And part of this book is historically, looking at it historically rather than as a snapshot. The interesting thing, and what the book is really about, is that out of the failure and pain of this way of building a system and because alternatives are not available, particularly the kind when I worked in the Senate, we could pass actually. And because the decay is worsening, in many parts of the country, not reported upon by the press because there is no press reporting on local developments anymore. The press is not interested and because of technological developments, the internet, etc. doesn't have the capacity, they just don't have staff. There are many, many, many things that are developing at the local and state level that suggest the beginnings of an alternative, I hesitate to say model, but of an alternative institutional base for a politics perhaps at some point. So let me give you an example of this. There are, as many of you may know, there are some 10,000 worker-owned companies in the United States. Most people don't know that. There are 3 million more people involved in worker-owned companies than are members of unions in the private sector, hardly reported on by the press at all. There are 130 million American members of co-ops. That is to say, that's 40% of the American population, co-ops and credit unions. And this is well established. The credit union is a one-person, one-vote asset-building institution. The credit unions involve taken together as much money as any of the giant New York Big Five banks. So very large structures that are one person, one-vote bank, for instance. In many parts of the country, ideas like land trusts, which is a non-profit way of owning land to control gentrification usually, which was a radical idea 30 years ago. There were two, one in Vermont and one in Southwest Georgia. Now there are hundreds all over the country that are building up, changing and democratizing the ownership of land through the land trust structure, another form of it. What we're seeing in Washington State, Washington, D.C., for instance, and this is another piece of the development, used to be that when the government invested in something like a mass transit system, a subway system, at every exit, land values would rise. And the developers would jump in to get stores and housing and so forth at those exits that were created by the public investment. And then the weak city government chase after them trying to tax back some of the gains. Not anymore. In many, many cities, that land is socialized essentially. Not the government owns the land, captures the values and leases off and captures the value for public purposes. It's another form of democratizing ownership. So I can go on to give you the pattern, but what we're seeing, and this is the argument of the book, we are seeing because of the failing system and because the old progressive methods are not working and can't work because the institutional base is gone, we're beginning to see the development in many parts of the country of new institutions characterized by democratizing ownership. There is also great interest in new things that may happen, for instance. Many of you know about the Bank of North Dakota. Perhaps not. Bank of North Dakota has been there for over 90 years. It's a state-owned socialized bank in a very conservative state. North Dakota is a very conservative state, but it's an extremely successful public bank supported by the co-ops, but also the small businessmen and also the farmers. And 20 states have introduced legislation over the last couple of years to establish their own public banks in their states. So it's another form of this development and interest. Another part of the puzzle. In many states, the health care system, and I think this is going to be a very powerful trend as time goes on, and as the current and the Obamacare system and its faults and difficulties hit the ground, some states, 20 states, indeed, have introduced legislation for single-payer. Vermont is about to have single-payer. We're probably by next year. California passed it twice. It was vetoed by Schwarzenegger. But the problem is that the system is creating pain and high costs that can't be resolved because the coalitions can't manage the power relationships. With the result that you get more pain, in this case costs and people being thrown off the rolls, and many people believe, and I argue in the book, that that trend is also likely to lead to democratized ownership. Now, what do I mean by that? A single-payer system is a public insurance company. It's a democratically owned insurance company. That's what Medicare is. And so when the states begin to set up single-payer, it is essentially democratizing the ownership of the insurance company and easing out in Vermont, and perhaps California next, different parts of the system. So there is a range of development underway not covered by the press that has a powerful cast, very American, very decentralized. It doesn't look like... It's an interesting part of it. It doesn't look like state socialism. It doesn't look like corporate capitalism. And one of the suggestions of the book is that we need to get our thinking away from these stereotypical models to begin thinking about how systems might begin to be designed, how they might begin to evolve in very different ways. And interestingly, in great part because of the American culture, this is not France. It is a go-to, roll up your sleeves, let's do it here, culture that begins to invent new ways forward, which gives me a fair degree of hope about the expansion that I've been running into on this book tour all over the country. Every place I go, people come up with a new model that I hadn't heard about that is out of the pain and out of the development, there is something building which in many parts of the country is very practical but has the basis of creating institutions, not just political movements. Let me give you a couple more things just in the time available, and then we'll have conversation. In many parts of the country, it is advancing quite radically in terms of power relationships. And the way to think about this is over time how it's advanced. In Cleveland, Ohio, for instance, and our group has been involved with this, there is a complex of large-scale worker-owned cooperatives linked together with a revolving fund so that they are not just freestanding and with a nonprofit corporation so that part of the money made by the worker co-ops will go to community building. And the complex is also supported by the purchasing power of what are called anchor institutions, universities and hospitals that don't leave poor neighborhoods. So in this particular neighborhood in Cleveland, the Cleveland Clinic is there, the University Hospital and Case Western Reserve University spend $3 billion a year with a B on purchases that's apart from their salaries and apart from construction. None of it to this very poor neighborhood, I'm speaking of the neighborhood of 40,000 average family income of 18,000, mostly black, but now have agreed to put some of their purchasing power into this growing complex of worker-owned co-ops which has a community-building aspect to it. And they're not small co-ops. They just opened about two months ago the largest urban greenhouse in the United States. Three million heads of lettuce a year is the production capacity, a very large-scale industrial laundry to service hospitals and nursing homes and a solar installation capacity which is likely to produce as much solar installation as it already exists in the state of Ohio over the next couple of years. And they're building out from that. Some of you may know of Mondragon. It's partly based on the Mondragon cooperative model in the Basque country of Spain. So the concept is not only ownership developing but in very difficult situations, this model has legs and begins to build out. Ten cities around the country are actively pursuing what's now called the Cleveland model and again, note the dynamics. It doesn't work anymore to bring corporations in and they leave after the tax break. Small business has no real market. The training programs don't lead to jobs and there is no option but to try something very innovative and new. And that's the larger dynamic. I can stand back from this and say at the national level we are also seeing crises developing. Virtually every expert I know who studies the banking industry expects further financial crisis at the national level and probably the next stage when the next one hits is break them up, that's the current hope for, I think nostrum, break them up. Because what we know from history is that once you break them up they will regroup and the big fish will eat the little fish and we'll be back where we are. At some point down the line the book argues that the old conservative economists from the Chicago School, Milton Friedman's teachers were right on this subject and I'll just give you a little bit more and then we can sit down and discuss this. And I like to tweak folks with this because I'm a follower of the old, I obviously come out of liberal economics and I was trained by the left Keynesians at Cambridge. But the old conservatives who trained Milton Friedman argued, and they got Nobel prizes for this, they argued that some corporations, the big banks in particular, were too big to regulate. They would capture the regulators and the whole theory of regulatory capture was developed by small entrepreneurial free enterprise economists. And then they argued if you broke them up they would regroup. The big fish would eat the little fish and Milton Friedman himself came to that conclusion later which left quoting the founders of the Chicago School of Economics which left only the option in some cases of socializing them. And I suspect that argument will come back over time as things begin to develop in another way as the recapture and the breakup doesn't happen. But another way to say that is this book and this argument is about historical possibilities and change not simply the next election. So let me say a little bit more about that then I'll sit down and we can go at it. Most of the developments that became the New Deal were developed at the state and local level first in the two or three decades before the New Deal and only when the moment of crisis and change and only after sufficient development at the local and state level in the so-called laboratories of democracy was there a possibility of going to the national level. And this book the same is true if you think about the women's movement in the 19th century only agonizingly state by state by state by state and finally national or if you look at what's happening with marriage in terms of gay marriage state by state by state and probably only ultimately nationally. The book suggests that because of the failure of the current paradigm and the radical decline of labor and that old institutional model that I certainly was brought up with as that decays the possibility of a new model is emerging and it's primary characteristic is a slow democratization of wealth and the creation of ideas concerned with the democratization of wealth giving an institutional trajectory of great interest and possibility out of pain and necessity. Now obviously the question is whether over time that becomes part of a politics. At this point it's institutional development and the argument of the book is that there are many options one of which is simply decay. Rome did decay. Violence could occur as we decay. That's another possibility. There could be violence and repression of some kind of corporate state but it is also within the range of possibilities that the creation of this direction of opening a very democratic picture of what the society might involve in terms of democratizing ownership may with a new politics begin to move in a positive creative direction over time in the model of building from the bottom up in the prehistory of the next great change as with the new deal. And obviously I suggest that the place to put your energies is to defend whatever can be defended in the old model but also the creative part of what's happening around the country and many, many young people are involved in this not reported on by the press. The creative part of what's happening is the so-called new economy movement which is involved with these kinds of ideas and also their ecological dimensions of that which we can again talk about in conversation. So I think I've used up my 20 minutes. I better sit down. Thanks. Have a seat. Thank you. To dig into there, I certainly want to talk more about concepts of democratizing wealth and spreading ownership but I've got a couple of questions for you and then we can open it up to discussion but I actually wanted to start with history. You know, you focus on some historic eras that unfold and of course one of the characteristics of this recent period has been the divorce between rising productivity and wages. We've had wage stagnation kind of in this from the late 70s on and this has occurred though it's kind of led to these new inequalities that you describe but it's also been at the same time where we've had growing kind of political rights that have emerged and what we might call kind of movement politics and I think you're a little bit maybe more skeptical of the potential of that and wanted to kind of ask you a little bit about exploring is there a relationship between expanded what you see going forward and kind of economic equity? It's very interesting. I was just up at Cambridge doing a commemoration of Martin Luther King's visits to Cambridge in the 1960s. I was involved in some ways with Dr. King and King came to the conclusion in the later part of his life and I agree with him that the fight for rights was absolutely essential but that was getting into the system but changing the system and the equity out of the system was a whole other problem and if you read him carefully he was clearly moving in the direction of some form of altering democratizing ownership as a way to kind of transform the system so I do think there are different paths we run a very successfully over great agony in terms of rights to get in and political rights but that does not alter the system question and so I think you get the economic failure of what we're getting and that's really the American kind of dilemma which I think we've got to challenge is to move in a new direction to do both. It's true. Obviously King's focus on poverty issues and kind of poor people's campaign toward the end of his life was underway and beyond. He was in his private papers and in many places even publicly he was talking about a fundamental restructuring of the system. It's not well known and I didn't know it until doing some research on it but he was saying the war on poverty and fighting for poverty issues doesn't work. The question is how do we begin talking and I don't think he had an answer to that but he certainly was aware and talked about it to his staff and even publicly that the system itself somehow needs to be democratized and restructured economically. The next piece I wanted to dig into a little bit was this ways to respond to kind of corporate dominations which are clearly a source of trouble. I've got a colleague here Barry Landry who does a lot of work on concentration and consolidation which has hit levels beyond what they were in the robber baron period virtually every sector of the economy has levels of concentration now and unions historically as you noted had been this countervailing force and you don't see any very limited role in the future but what else can replace them give me a little bit more about what these new institutions might look like. First let me say I think Barry's work is terrific. I disagree with his hope that we can break them up I think the political capacity to do that but he's laid out the picture of concentration better than anybody that I know and it's really important work. Look I see this as a historical development not simply a quick answer. I think times in many ways are going to get worse. I think the concentration of power is going to increase and I think that the pain that that is causing is likely to increase. I think we are into an era and it's very hard for people to grasp particularly living in Washington that we may be at a time of the pre-history like the last three decades of the 19th century is a good kind of marker the time when something is really going wrong but also there's struggle and exploration and rethinking and experimenting at the grassroots level with different models. So that's how I see it. I think the counter veiling to the corporations is to keep them in place and try to hold them in line by regulating them. The alternative model is think about the Vermont model I mentioned if Vermont goes to single payer and it's highly likely that it will this is not counter veiling and regulating the insurance companies displacing them and putting something else into place a public corporation at the local level the mayor of Cleveland has a new alternative for economic development by looking to this expanding model of economic development rather than the corporation which is being displaced in terms of power. If these models expand that I think is the trajectory of change that more and more democratization becomes a viable possibility. Now there are a lot of if's in that statement. If the pain continues, if the models continue to expand if there's a political development along with it. Again the press doesn't cover much of this but if you get out around the country and talk to younger people and see what's going on in some of the cities I was also in Atlanta recently they are doing something called lettuce works. What is that a large kind of greenhouse under public ownership or quasi-public ownership or democratized ownership is the freight there is more happening than I think people in Washington realize. Right and so these institutions are going to emerge organically with kind of self organizing entities. They're going to also be legal like community development corporations that have been active for a number of years. It will be a whole range of them. And what about the role that the state and policy plays both at the federal level and the municipal level. I mean you know these things are just like the market is created by government and by policy so are these institutions enabled. Good question you mentioned the CDC movement and we talked earlier I was very much involved in the creation of the early CDCs working in the senate and so forth and the CDCs that we talked about earlier the original model for CDCs was an ownership model not simply to set up housing and small business and that was changed in the Nixon administration and partly by the Ford Foundation but I think it isn't simply that I at least I certainly don't expect this organic development to magically kind of grow out of nowhere. That is happening. The trick will be whether or not a new politics picks up on it and builds a political base along with an institutional base and that's the same thing happened again in the pre New Deal in the late 19th century a politics came along with the institution. Along with the municipal and state level action so you still have that relationship but politics has to form as well. Politics must form but with a different institutional undergirding and a different institutional thrust that is to say these folks involved in these various projects are already beginning to get the state involved in help out with public programs at the state and local level national procurement the many things they want from the state and since they're all businesses anyway they're also using many of the things that business takes for granted from the state but ultimately if there is a growth of this and I think there will be there are many ifs how far it will grow clearly it's already clear that they will want things from the government from the state to further this development. Loans technical assistance grants everything that business itself is asking for but for democratized ownership and we shall see again where historians had and if you look at the way movements develop historically including the labor movement in its early years that's the way it happens and again in Washington we kind of are looking at the next election or the next headline if you stand back and ask how do these things change you get a little sense of there is some driving force and largely pain largely pain things getting worse that force people to explore these alternatives so I am cautiously optimistic both that this is a positive development and possibly it may lay the groundwork for something far more interesting if we see it in time and if people begin developing a politics around it we'll see the book ends with a lot of different options some of which may go nowhere and some they go very far I wanted to ask what we'll open it up in a moment here a little bit more about your thoughts on the banking sector and financial services generally I mean this is another area of the economy where we've had massive concentration we had massive failure the state did step in in a particular way maybe not the way either of us would have carried it out last year you did write an op-ed in the New York Times kind of calling to argue to kind of nationalize the big banks but it seems like you feel like there's promise at these at the local level too with credit union models where there is kind of one person one vote governance and I'm just wondering for you your thoughts on where the credit union movement and responsible lending might go I mean it's out there it has a history but it doesn't seem to be increasing its market share the New York Times article that you recall was simply recapitulating the conservative argument that the conservatives had argued if you can't regulate them the only thing that's left is nationalizing them they were having and the Times enjoyed having fun with that argument but I think that's right I think the conservatives were right if you can't regulate them so let me toss it at you it's very nasty argument if it is not possible given the power relationships to actually regulate them and if you break them up they will regroup and you can't regulate them the old conservatives who certainly were not socialist said the only way to preserve a free market is to publicly take them over very clear strong argument on principle not about politics so I think that argument is probably right and I think we may see that because I don't think you can regulate them on the other hand I do think it's the credit unions can the credit unions in this country have been very stagnant they are very large but there is a growing movement within the credit unions to begin to liven them up and begin to get a little action out of them so that's one piece of it we see state banks developing along the lines of the public banks of North Dakota and I'm a decentralist my argument would be whatever can be done at the local level and the state level only as the Catholic Church really argues only in the end in the theory of subsidiarity only when necessary move to the national level but this is a process where I think you're seeing I was in one state to just give you a story about this credit unions are one person one vote banks they have as much capital taken together as any of the big banks and nobody goes to the meetings that is to say they're boring nobody ever goes to the board meetings people in one state I'll leave that aside realize that they could join the credit union go to the annual meeting nobody else was there and they could elect the board and do much more creative things that little idea is percolating and beginning to nudge some of the credit unions into much more interesting loan practices than simply cars and houses was basically what they do they are limited to a certain degree of what they can do but there's a lot of openness for many people the kinds of financial services they can get at the credit union is what they need they need an account they need to pay their bills they need a loan and so yeah I'm very high on what they can do but I'm concerned about the stagnant nature there would like to see some opportunity okay well let's open it up for some questions we've got a mic we'll go one two three four five to start and okay there you go thank you for holding this event and thank you for speaking and sharing with us today on the question of these you know starting these institutions but the need for them to also be a politics that develop alongside them I'm a little concerned about the inclusiveness of that kind of politics if it ever develops and my thinking is I went to briefing at the economic policy institute recently and the sort of the main point that stuck out at me was that black unemployment at its best of times mirrored white unemployment at its worst of times and that has been true since before you know the great recession but in my work in DC so far I have already encountered some resistance to targeted approaches you know towards communities of color and incarcerated folks who are trying to re-enter communities in favor of a well you know rising tie lifts all those less to general strengthening of certain programs and things do you see that kind of discord so when you build these new institutions how you can make them inclusive ones I agree with the concern and the Cleveland model for instance is in a almost entirely black neighborhood and almost entirely black participation and similarly in Atlanta we're seeing the same thing but unless the model begins to develop in many communities and particularly as inclusive I think it's a failure but I also think that requires intention the decision to do that as a clear intent and I think that's a part of the next stage and that is within the capacities of people like folks in this room who are concerned about politics to make that happen but I do think it's open we are finding in communities of color very great interest in this there's some work being done in Texas in emerald of Texas which is Hispanic as well very inclusive models so it requires facing the question as you've posed it but also getting intentional about it but I think it is open to that direction I'm going to be quick Robert to try to sneak two quick ones in one there's something I don't know if your book addresses it's the power of the markets rarely exercised from what I can see but let's say California for example would say thou shall not sell gasoline unless it meets our certain standards thou shall not sell too many automobiles unless some of them are electric there is a power there when the political will is there do you see a place for that more and if I could real quickly your second question about the press not covering some of the notable things going on in this area does that mean they've also failed in terms of covering some of the problems associated with it so let's take the second part first and then go back to the I think the press has failed and I think it's partly a less interest in these questions I mean the ownership of the press is conservative in terms of business press and its business ownership but I think it's overwhelmingly from a different perspective namely the press newspapers and television are in severe financial crisis and they have cut staff everywhere and this is the easiest place to cut staff what's going on in local grassroots developments and the state levels the coverage of state legislatures is ridiculous in terms of press coverage so it's partly lack of interest partly conservative nature of the press but most overwhelmingly fiscal problems financial problems I do think there's a role just to go back to your first question and not surprisingly you picked California which is one of the states with a substantial labor movement and it's different politics I think because of that and partly because of the Hispanic nature of good part of the labor movement the politics of California is somewhat different from many parts of the country I always get this question when I speak in California wherever the state can be playing a positive role as it did in the older days nationally as well in my view I certainly think that I favor that I'm not interested in creating more damage but I think there are very few parts of the country where that's true anymore that the old model in which the state could play that role is available it is possible and this is the argument of the book that if there is a new politics developed with a new institutional base over the next decades as in the pre-new deal the institutional from the bottom up there will be a new capacity to use the state positively and that's a direction I would favor but I think that has to be seen as a historical possibility and an evolutionary possibility I'll respond to the media question obviously the evolution of the media is a big public policy issue and one that we look at here at New America and some other formats and some of my colleagues dive into this question so the business model clearly is broken and it has implications for how local issues do get covered and I think there is a search for alternative ways of communication and covering the rise of journalism schools that are now playing taking over some of that beat along with some other efforts so we do have some colleagues here in the Open Technology Institute that are doing some important work on media that are worth tracking down sure, right here and then in the back and then I see you two Thank you for a very provocative presentation I had two questions but they're brief one you say that the decline of the unions is not reversible and I'd be interested in knowing your thinking on that and secondly you commented that it's impossible to regulate these big corporations as it does seem to be particularly as they use their financial means to buy political power how is it going to be possible to nationalize them Good Well the and when's the next crisis hitting Restate the first question again please Yes I think the decline is not reversible I think they will continue to decline with certain exceptions and I think there are lots of reasons for that the usual reasons that are cited is change in sectors globalization globalization in particular has undermined the unions and that's certainly clear but the argument of the book is a little different and it's a historical argument unions have always been weak in the United States far weaker than most other countries and for good reasons I believe the period of high union strength which never got more than 34% the Swedes were at 80% was an aberration from the normal trend so the unions were 11% in 1929 they're now 11% again partly that has to do with race in the United States the racial division so you couldn't have a national union movement the South was excluded always because of violent repression that is a terrorism Ku Klux Klan partly that has to do with scale very expensive to organize a national movement on a continent we tend to forget how big the United States is you can drop Germany into Montana it's much easier to organize labor unions in smaller countries so I think there are lots of reasons why labor has always been weak and then it's exacerbated by globalization and so forth and again the second question I'll try to deal with that even the senators are saying they bifluid it's just common knowledge one of them was quoted in the paper today just saying how if they're the ones being bought and they're the ones saying it so you have to put on your historians hat to do this one the argument of this book as a historical argument is times are getting worse and the argument of the book is you can't regulate them and you certainly can't do it now and you certainly can't nationalize them although by the way did you notice we nationalized General Motors, Chrysler and we still own AIG the largest insurance company in the world nationalization is a certain possibility in the United States it just happened but the argument of the book is not that argument it is that if there is an ongoing development of a 20 or 30 year form in which notions of democratization become conventional from neighborhood corporations and co-ops and we didn't talk about municipal utilities there are 2,000 publicly owned utilities in the country state level ownership 27 states have shared ownership in companies through startup corporations that are publicly owned Alaska has a publicly owned way of distributing resources if a culture and knowledge and democratization culture becomes conventional at some point some of the larger institutions like the big banks may well fall into that category that all that's left to do is make them into public utilities so that's the largest possibility over time of where this trend as I say the book ends with different possibilities that's one of the largest one system changing direction which would democratize ownership at much larger levels and I'm a historian these kinds of things happen all the time in history we need to stand back from our moment thinking nothing can be done and because the old system actually is teaching us nothing can be done the old way and the argument book is precisely because that you're seeing something else develop there's a really interesting statistic that some of you probably know about which I ran into recently people under the age of 29 I believe is maybe under 30 these are the people who are going to create the next politics people not my age people under the age 29 ask whether they favor the word capitalism or socialism there's been three studies three national surveys two of them come out well it's about even in the latest one 4% more favor the word quote socialism the old days when that word was anathema that was Stalinism I wouldn't be surprised that we see many many different forms of ideas I don't think they knew what the word socialism meant in many cases but it doesn't have that quality I have to give you one other interesting thing I have a piece in alternate this morning the Obama the Obama administration is trying to sell off the Tennessee Valley Authority they want to have a little they want to show some gains on the budget see it'll produce minuscule changes from the national deficit it's the conservatives in the Tennessee Valley Republican senators are all fighting against getting rid of socialism in the Tennessee Valley Authority so I don't know where all this will go here we'll go to the back row Ibrahim Mukman and associates my question is a little similar to what the lady was talking about about 10 years ago I was a consultant and working in Flint, Michigan and I had to put together a collaborative that included people from General Motors and the UAW and I was just struck that the union was not more interested in doing stuff to own companies and you talked earlier about I think some 10,000 worker owned companies and it seems like to me with billions of dollars and what do you call it pension funds and other things one of the ways to help move the needle in the other direction would be to help some of the workers become owners of plants does that make sense or is that illogical that's a very interesting argument because what's happening is some parts of the union movement the light bulb has gone on that you've just pointed to so let me give you just and again I want to give you this historical perspective again I was called in to help workers in Youngstown, Ohio in the first big steel closing 1977, Youngstown Sheet & Tube went down, 5,000 people lost their jobs it was national news had all over the country we hadn't seen that in the United States 5,000 people lost their jobs now it's very common so it's not news and the workers in that locality and the local ecumenical coalition and the local mayor said why don't we put this mill back to work under community worker ownership it could be done and the Carter administration financed a very sophisticated study and I was the supervisor of the study it was done by experts in the steel industry they came up with a viable plan there's a debate about whether they promised 100 or 200 million dollars in loan guarantees to put it into place the Republican governor everyone in the state the politics was done well Rhodes was a conservative governor everyone is for it, even the Republicans and then after the election in 1978 it collapsed however they did public education throughout the state of Ohio so you find lots more worker owned companies in the state of Ohio coming out of the public education and ultimately this Cleveland development back to this whole cultural long-term development but to your question the sharp edge of your question is really interesting in 1977 the international steel workers union the guys who ran the union the national union were violently against the workers locally proposing such an outrageous idea as the workers should own the mill and indeed probably undercut along with the corporations the Carter administration commitment in any case they and I also didn't like all these upstart activists who might challenge them the steel workers over 30 years of evolution are now the leading force behind worker ownership in the steel in the union movement and they've moved to the position that you've articulated and there are several other unions that are exploring an SEIU for instance and some others that have actually developed it so there's a small movement within the union movement to build out their power in a new way that involves this direction of worker ownership let's go to the two in the back row then here and here I'm Norm Curlin from the Center for Economic and Social Justice and the person who knows more about worker ownership for the last 40 years than most people in the country well I want to congratulate you for making the issue of democratization of ownership a central theme now I'm hoping that other academics begin to recognize that there's another way to distribute incomes you can distribute it through jobs but you can also distribute it through ownership if the system is changed just as the system was changed for worker ownership as you know I have two questions one deals with the unions as you may recall I used to work for Walter Ruther when he headed the citizens crusade against poverty and he pointed out a way that if the workers could gain their incomes from the bottom line it would not go into prices and therefore they would be more competitive globally so the ownership issue was central and I'm just hoping that the labor unions will wake up and convert themselves from labor unions to ownership unions which would also include taking care of labor issues I think that's an idea that I think a person like you could help communicate the second thing relates to I so agree with you on the issue and the goal of democratization of ownership but there are several ways to do it and that is as you know in an alternative way he didn't call it socialism and he used the word capitalism or democratic capitalism which I don't think capitalism describes Kelso but it's a just third way they talked about justice and therefore in that I'm just curious there are four pillars for what I call what Kelso would have called the just third way conservatives will never argue against them but it's the last one democratization of ownership is what is the missing element in a national strategy in a global strategy straighten out the system the first three and this is where the problem of labeling it collective or non-profits the four pillars are the restoration of private property and its original sense is understood by the founders power and also the right to the fruits that's just a basic legal definition of property and that has been violated under corporate law if you're a shareholder you have no right to the profits as you know the second thing is the restoration of the market system into a just market system and today with the concentration of ownership you can't have a just system because you have inevitably the kind of concentration that leads to the corruption of the present system the third thing is the role of government and that's very important the role of government the government is the only institution the only social tool we've invented that is a natural and legitimate monopoly it's a monopoly over coercion so anything like you talk about the decentralization it has to be decentralized not just to the state level or the city level but right down to every human being as a fundamental human right and this is even recognized in section 17 of the universal declaration of human rights it says everyone should have the right to become an owner this is violated you see and therefore you for opening up the new dialogue I think Kelso offered a system which we call the capital homestead act taking from Lincoln's extension of land which is a finite to all forms of wealth producing assets of land and all of the job destroying technologies the energy slaves as a means by which we can liberate the wage slaves the welfare slaves the charity slaves and the debt slaves under the present system let me see if I can respond what are your thoughts on Kelso first Louis Kelso was a great maverick innovator in this field he was a corporate lawyer and banker who wanted to transfer ownership and indeed was behind the laws creating allowing for the creation of ESAP Norman was key to that process and it's a very important development I don't agree with Kelso in some things there's a long discussion here possible but Kelso was interested he knew that ownership was a critical element and was very important he deserves respect and he also deserves challenge and debate and discussion along the lines that we've preceded but the principle Kelso was a banker this is kind of the way a number of his very wealthy people came to him as a lawyer and what he found out was they would hire experts to invest their capital that they had inherited and because they had capital they could borrow money or have their experts borrow money so the person himself just had an expert doing it and could do it because they had capital which was able to get more loans he said well if the public could be in the position of ensuring loans and hiring and offering the capacity to hire experts everybody could do what the person who inherited could do this is a conservative banker and that was one of the interesting questions that came up why we should distribute capital in a different way he was not interested in the idea that most people who own capital actually did that much from a conservative point of view not from a liberal point of view it was a very important figure in all this even though I made a difference with some of the places he ended up he was innovative and he's behind the ESOP movement and it's very important work yes here and here and then there's one more over here thank you Art Domeich from American University Gar you and I both grew up in Wisconsin subject to admiring and studying the Wisconsin models of political activism and the progressive movement and all given what's happened in Wisconsin subsequently although I do admire your optimism I think that I find it hard to imagine that Wisconsin is going to return to what you and I liked and studied can you at least give me a little hope he just called you an optimist you're a little bit of both it's a very good question I am from Wisconsin and I brought up in Wisconsin Wisconsin progressive tradition I work for Wisconsin Senators where's the progressive tradition today well here's the interesting thing I have said the argument of this book is that traditional liberalism out of which I come depended upon an institutional base which is declining and disappearing so I am not optimistic about the resumption of liberal politics I think it's in decay traditional politics I do think there is a possibility viewed historically of the evolution of a new institutional base which involves democratizing ownership in many many parts of the system that counter veils displaces the Vermont insurance company model and may begin to allow a base for new politics beyond as historical development I think that's very real possibility as a historian and I think people don't normally think of 30 year spans so let me tell you I'll give you just a moment of optimism because I find that most people are lost as we all are in the day to day headlines nothing works in Washington nothing ever can work I was a kid in Wisconsin when Joe McCarthy was around McCarthy was a Wisconsin senator not only a national figure you think it was bad nationally in Wisconsin they shot anything that moved politically so if you had asked can there be a progressive era in the late 1950s you knew certainly your pessimism was warranted and then the 60s happened out of something you didn't understand it doesn't mean inevitably that dark moments lead to progressive movements but it does mean one ought to be very cautious about assuming that today's headline defines the historical era we're in and I think that particular way of seeing things historically is very conventional all the Northide fell faster the Berlin Wall fell faster the American Revolution a bunch of farmers and small merchants defeated the greatest empire the phenomenon is very conventional of people not thinking they can do things and things happen so I'm not a rosy-eyed optimist but I am a historian and I think we ought to look at our own time in slightly different ways you can't move anything in Washington so it's all over maybe we'll get three comments questions right in a row and let him respond so let's start here and then we'll move the mic around you've been talking about the hopelessness at the national level and moving things down and the more hopeful scene at the perhaps state and local level particularly on the subject of the states the states seem to be evolving into very blue and very red states and do you find any lineup with the more hopeful grassroots type politics that you're talking about in the progressive states the blue states as opposed to the very conservative leaning of the red states let me respond to that quickly I was going to say I think we'll let you go one by one that's a very good question the book argues there's a chapter in the book called checkerboard strategy which is really red and blue states and it argues and this goes to the pessimism question as well that in a number of states the kinds of things I've been talking about are advancing and are likely to advance Washington state and Oregon are probably going to be the next states with the public banks at least it's more advanced there we'll see if it happens but in the checkerboard it's like a checkerboard in some of those states there are going to be very interesting solutions developing new ideas and new practices around this is already evident in many parts of the country in the other states the red states there is the old model but pain levels as well are growing so part of the argument is as the checkerboard evolves we may well see very interesting advances in many parts of the country even as the pain that is incurred because of the red state policies creates more and more upset difficulty in other states and we're only beginning to transfer some of the learning in the other states may very well be real if you see it as a checkerboard great and then we'll go in the front row here and then behind you thank you I think that your observation about power relationships and renegotiating the power relationships is fundamental to your your theme is worth exploring and in that context it seems to me that one of the transformative situations is the internet the development of open source and we've seen for example a corporation like IBM which was me mine build fences opening itself to the use of open source and multiple providers etc so I'm wondering when you look at an institution like your own like academe and we're going to these moogs aren't they called there's huge fights in academe where we should go with that how is this transforming the delivery of education do you see people within institutions like your own getting out there and embracing some of these models and teaching kids certainly we've seen the cost of education the debt that kids are taking on as huge burdens and advancing beyond the inflation even in healthcare so that would be a place to apply that and then the other part of this is the concept of frenemies if you had the 400 billionaires sitting in this room what would you be saying to them how could they be your friends and make use of them we've got Bill Gates and Warren Buffett running around the world trying to redeem their soul saving Africa I mean why not America okay well first I would welcome any of the billionaires you want to play we have lots of things we can talk about anytime and I do agree and the open source possibilities are really important and speaking to about the academic world I must say that they're in some parts of the academy and I don't know anything about the sciences it may be better but I do know something about economics and I do know something about political science and I must say they are closed systems I have it's very hard to get any new perspectives through those systems it's troubling I mean I was trained I did a Ph.D. at Cambridge University I experienced a different kind of intellectual environment which was much more open at that point what happens is a young graduate comes in the first 5 or 6 years of their training they better keep their nose clean because they've got to publish in an important journal and the important journals are controlled by the establishment so they've closed their minds and then they've got to get 10 years so they've got to keep and it is a very very difficult system to advance and explore new ideas so I think they deserve being broken open and the MOOCs and the mass audiences are one part and alternatives to find ways for more discussion is another part and really just being challenged directly economics and political science particularly are very very tight preserves and I think are part of the problem but the technology is really opening the door in some ways that could be very explosive and very exciting I think these two will be our final ones actually we'll put you in as well my name is Ken Sandin healthcare now at Maryland I appreciate you mentioning the Vermont single-payer experiment in Maryland we, I mean Maryland Physicians for National Health Program and its grassroots arm healthcare now at Maryland we gave up on a 6-year campaign we had to get a single-payer built through the Maryland state legislature we abandoned that because we got 50 co-sponsors we could never get anymore so we've now gone to a grassroots campaign we've aligned with united workers and so we're going strictly grassroots with a Vermont-style healthcare as a human right campaign so I wonder if you might comment on that particularly how your model how we might incorporate your model that's in Maryland you're saying single-payer is a public insurance company that's all it is we tend to fancy it up and this placing of the private insurance companies but the argument here is and I think we're going to see it with, even with Obamacare that the pain levels in different states are going to increase and people are going to be feeling the pain corporations are now doing, there's a movement what's called skinny policies which is just very narrow with no healthcare they meet the technical requirement but they're terrible policies and then people get sick and out on the streets bankruptcies come from healthcare primarily so I think the pain levels are going to increase around the country and as that happens I think the base politically for more movement in the direction of an adequate system single-payer being a major step in that direction is going to be more and more available as time goes on so I am a pessimist about the near term but I think it will have ramifications that will open the direction in the long term and I think it will happen, I think states like Maryland are likely candidates for longer term change Thank you Right here in the front row and then final question over there on that Hi, my name is Jim Loving from Silver Spring question about the politics you mentioned that in the early stages that this democratizing wealth model is expanding and that perhaps over time the politics would follow do you see today in the early stages whether it be at the mayor level any adoption by either party of some of these principles into a platform and then this may not be your field what do you think the possibilities are similar to what happened with the Tea Party which was an impart reaction to the system failure of a different type of perhaps in 2014, 2016, 2018 it being adopted by either of their existing political parties Well I think in one level these are just practical things that politicians can be for it's not ideological in many parts of the country to say that it would be good to help these local co-ops, it's not a big deal and mayors can do that and are doing that so I don't want to cast this as a major ideological crisis I think if it built up over time and began saying we'll take on the big banks in a new way it probably would get more ideological and probably should because there's a big debate about what is the nature of the country but I think the important thing to notice is that a lot of this is doable now and is helpful to politicians who do it and that is important it is not it is a positive way forward many states, many cities are looking at the Cleveland model which is using these large and called anchor hospitals and universities but the city government has a lot of role to play in helping this happen and it is happening in many parts of the country it's positive, not negative and it shows you what can be done when I talk to young activists about this and there's a whole ideological frame about this and my experience is the most important single thing is what you propose practical we have a problem here well it solved the problem and if the model in Cleveland will actually produce jobs and ownership and changes for that Cleveland model is the ownership of the means of production by poor workers and small business people like it because it makes sense and so that's the key to this whole phenomenon the local politicians will talk about it they'll herald it what has been the response of the elected officials in Cleveland? Cleveland's been very very positive response of the elected, been very very helpful and it isn't seen ideologically I come from the Midwest small city, Racine, Wisconsin you can translate these ideas into very, if they're practical if they're practical you can have a conversation with anybody including my very conservative medical buddies in Racine that makes sense people great and final question there comment hi I'm Marco Buazzoni I work on sustainability well-being beyond GDP and I'm curious about these topics in the sense that these communities you've been talking about are obviously good at creating more wealth for people and providing incomes and so on and I'm trying to think about what does it work if you also think about sustainability component and also if you think about well-being also not just economic wealth but also quality of life a balance between what work time and family time and what not and so I was wondering if you can talk a bit about how these new institutions could play a role in these areas that go beyond the economics that's a very good question and it's about how ecological issues are related to this in my experience there is an affinity between the ecological movement and the new there's a term of art these days the new economy movement and I've been talking about things that are popping up in the new economy movement all over the country for the kinds of things I've talked about but also virtually all of it is ecologically oriented as well so for instance the Cleveland model that we talked about it's not only solar installation but if you look at the laundry it is the greenest laundry in that part of the country used about a third of the heat and a third of the water by design being green it's green out of politics and political concerns but the hospitals it turns out it's good for the hospitals to buy from ecologically sustainable business and advertising it so it's a plus in terms of that the whole orientation that I'm experiencing when I'm writing about this or the research is there's a great deal of interest in how do we combine ecological sustainability in institutions not just regulating and where that ultimately goes is if you really want to get to the ecological problem the growth problem and you can't regulate the oil companies what do you do about that ultimately you either build up an alternative they can't be regulated and they must grow the large corporations have to grow they have to go to Wall Street for their cash so ultimately some of those that whole system is in question ecologically so there's a convergence of deep concern from the ecological point of view about systemic design that might actually produce results if you can't regulate them and there's growing awareness that James Gustav Speth who you may know was one of the leading establishment environmentalists has just written a book about this subject about how do we combine the traditional models and it all comes together on the so-called new economy movement of the kind we're talking about great well thanks for your time today Garth thank you for joining us I appreciate it what then must we do available across the country great thanks very much