Review: "America Beyond Capitalism" After the Rise of Occupy

Review: "America Beyond Capitalism" After the Rise of Occupy

"America Beyond Capitalism" book cover By: Gar Alperovitz
"America Beyond Capitalism" book cover By: Gar Alperovitz

The rise of the Occupy Wall Street movement and its national (and international) offshoots has made Gar Alperovitz’s study, America Beyond Capitalism, more relevant today than ever. The reasons stem from Alperovitz’s deep understanding of the systemic crisis of the U.S. political-economic system. They also stem from his insights into the obstacles that prevent meaningful movement beyond this crisis (and others) and how to overcome them.

Alperovtiz’s insight into these crucial matters is a product of his approach, specifically a commitment to intellectual as well as political rigor. In other words, his study confronts the following truism head on: achieving meaningful system-wide change requires not only serious ideas about what makes for a more desirable society, but also ideas on how to concretely build towards it. In this way, he eschews “walking intellectual corpses—ideas that . . . no longer have much structural relationship to the living realities of the modern political-economic world,” like dominant theories of liberty, which disregard the liberty-depriving effects that real-world conditions create for ordinary people.

Alperovitz’s thought stands apart from the “walking intellectual corpses,” in large part, because of his empirical focus. It’s through this focus that Alperovitz locates “practical precedents,” or real-world institutional experiments and trends that both embody principles of a more decent society and have the potential for concrete growth and development. From this sturdy empirical foundation, Alperovitz launches into fruitful discussions on long-term progressive strategy and vision for a future society.

A CRISIS NO LONGER IGNORED

Progressive activists perform an indispensable role in history by tapping into underlying radical sentiment within the public and channeling it in constructive directions. To perform this role effectively a deep and context-specific understanding of systemic neglect, exploitation, and oppression is required. For those seeking to understand the U.S. context, America Beyond Capitalism is an essential study.

Writing several years before the fallout of the financial system in 2007-8 and the misery it has unleashed at home and abroad, Alperovitz made the case that the U.S. political-economic system is in a state of “systemic crisis.” One of his major contentions is that the “historic values” of equality, democracy, and liberty have been under systemic attack. In advancing this contention, which Alperovitz does through painstaking research, a picture of a vicious cycle emerges, where the assaults on these values reinforce and reproduce each other, further fueling the cycle as it hurls the nation deeper into crisis. This picture captures well the domestic performance of the U.S. political-economic system during the neoliberal era. For progressive activists, elevating Alperovitz’s contention to the level of popular awareness is a task of crucial importance.

The Occupy movements have largely focused on how assaults on equality and democracy reinforce and reproduce each other. Take for example the connection between rising inequality and deteriorating political democracy. During the current neoliberal period (which is discussed in the introduction to this issue), income and wealth inequality has skyrocketed. According to Alperovitz, it has skyrocketed to such a great extent that in the US “ownership of wealth . . . is medieval in character.” He cites a figure in the introduction to the second edition that illustrates well “America’s near-feudal patterns of ownership”: “the top one percent owns almost half of the nation’s investment wealth, and has more net worth than the bottom 90 percent put together.” As a result of money-dominated politics, the rise of medieval America has further strengthened the ability of the super-rich vis-a-vis the majority public to exert greater influence over state policy, elections, management of the economy, and more. The Bush tax cuts for the wealthiest Americans illustrates how such influence manifests in policies that only exacerbate income and wealth inequality.

What has received less attention, however, is how individual liberty has deteriorated as a result of the systemic crisis. Alperovitz’s discussion on liberty focuses appropriately on the liberty-depriving effects of real-world conditions. The neoliberal era has been marked by the stagnation of real wages and income for the majority of the population and the sharp increase of work hours, as well as debt. Alperovitz puts in perspective these trends:

Hourly wages of the bottom 60 percent did not rise as fast as inflation—with the result that the real income each person earned, hour by hour, was actually lower in 1995 than in 1973. For very large numbers of Americans, the only reason total family income rose—very modestly—was that people worked longer hours and/or spouses (mainly wives) went to work in increasing numbers.

He explains further,

Put another way: unless they worked more hours or someone else in the family went to work during these years, many would have been better off if the economy had simply stood still at the 1973 level. Economic growth not only did not increase the real pay that an hour of work earned, it brought with it price increases that reduced real income.

Some of the areas where prices have increased dramatically are child care, housing, health care, and college tuition. It’s crucial to underscore that minorities and women have been disproportionately impacted by these trends.

Alperovitz argues persuasively that without individual and community economic stability and adequate free time, liberty is severely limited under real-world conditions. The reasoning isn’t difficult to grasp. “Individual liberty obviously can never be fully realized if men and women must work devastatingly long hours simply to feed and shelter their families,” as has been increasingly the case for more and more Americans. “Only if individuals have time that they can dispose of freely as they see fit can liberty be truly meaningful,” he adds. The same can be said for community involvement and democratic participation. Hence, the vicious cycle.

Alperovitz goes in to much more detail about the nature and various implications of the U.S. systemic crisis, including a discussion on the threat to real ecological sustainability as it relates to this crisis. After digesting his thoroughly researched and well-reasoned analysis, it is difficult to deny his conclusion that overcoming the state of crisis requires “radical systemic change.”

Interestingly, at the time of the first edition’s publication (2005)—the same year George W. Bush entered his second presidential term—he anticipated a growing popular recognition of the need for radical change. He made this assertion while admitting that the general public largely failed to recognize the severity of the systemic crisis at the time.

“The idea that the American ‘system’ as a whole is in real trouble—that it is heading in a direction that spells the end of its historic values,” he writes, “is difficult, indeed all but impossible, for most people to grasp.” Despite this deficient “grasp,” he anticipated that the increasing pain inflicted from the crisis would likely provoke a populist “backlash.” Furthermore, he claims that that the historical trajectory “points toward an ever more sharply focused challenge to corporations and elite concentrations of income and wealth,” and that “there is likely to be an intensified process of much deeper probing, much more serious political analysis, and much more fundamental institutional exploration and development” in the first decades of the 21st century.

In the introduction to the second edition (2011), he explains how this “message seemed distant to many readers” at the time. But in the winter of 2012—after the financial collapse and the Great Recession that ensued, as well as the rise of the Occupy movements and the earlier uprising in Wisconsin—the message should resonate.

In his more recent writing, Alperovitz points to evidence suggesting growing popular openness to radical, progressive change. In a May 2011 article in The Nation, he claims that “new economic” experiments, where principles other than profit-maximization are introduced into institutional design, have “proliferated and earned a surprising amount of support—and not only among the usual suspects on the left.” He cites the financial crisis and climate crisis as reasons for the increased momentum. In another article, he refers to a 2009 Rasmussen poll that reported how Americans under thirty were “evenly divided” as to their preference for “capitalism” or “socialism.” Alperovitz offers a plausible interpretation of the poll:

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.

The ability of those involved in the evolving Occupy movements and their offshoots to stoke the “desire to heal the world” and channel it in constructive directions will determine, to a great extent, the potential for fundamental change of the US political-economic system. Doing so requires more than just a deep understanding of the US systemic crisis. It requires strategy, which brings me to the second reason why America Beyond Capitalism is more relevant in the winter of 2012 than in 2005.

OCCUPY WEALTH AND STRATEGY

Alperovitz’s study offers critical strategic insights. These insights are a product of both his understanding of the current systemic crisis and awarenesses of “practical precedents.” To be clear, America Beyond Capitalism does not provide a strategic blueprint. Rather, it establishes some of the key parameters that, in my view, should guide any process of developing a longterm progressive strategy.

The starting point for his discussion on the prospects of moving beyond the systemic crisis is his recognition of “not the total blockage of traditional progressive strategy but a substantial and continual fading away of its promise.” Bearing the record of the last thirty-plus years in mind, it is difficult to challenge his claim that traditional reform measures have been weakened. Chief among such reforms are “after-the-fact” taxing and spending measures intended to counter rising inequality and poverty, and antitrust efforts and regulations meant to contain corporate power. A primary structural reason for the decline in the effectiveness of such measures is the decline of union power. “eacetime U.S. union membership peaked at 34.7 percent of the labor force in the mid-1950s; it was a mere 12.9 percent in 2003 (8.2 percent in the private sector),” and this trend, he claims, “is all but certain to continue.” The effect has been a decline in the power of labor unions to serve as a “countervailing force” to corporate hegemony.

Due to this decline and other structural factors, Alperovitz concluded at the time of writing that the systemic crisis and the pain it unleashes for the masses will get worse before it gets better. Events following the 2005 publication have confirmed the projection. Even with the heightened activism we’ve witnessed in the last year, there appears to be no progressive turn in sight in the short-term. As Alperovitz points out in the introduction to the second edition, the Wisconsin and Occupy uprisings have maintained a “resistance posture.” In other words, efforts are geared towards protecting what has been gained in the past, not fighting for more. For example, the struggle now is largely to stall the advance of austerity measures, attacks on collective bargaining, tide of foreclosures, rise of inequality, and so on. “Few have hoped positively and progressively,” writes Alperovitz, “to significantly increase taxation or public expenditures on social programs,” or pursue other measures that can reverse these devastating trends, not simply slow them down.

For these reasons, any prospects for serious progress will require a commitment to the “long haul.” Hence, the need for a long-term strategy. Given the current predicament, a question of paramount importance then is: How can the current “resistance posture” be transformed into one of advancement? Put differently, how can progressives rebuild a base from which to push forward?

In order to gain traction on these questions, Alperovitz calls readers attention to the “extraordinary explosion of practical real-world economic and political "experimentation” that has been taking place in the US—under the mainstream media’s radar—over the last several decades. These experiments are united by their institutionalization, in one form or another, of the following principle: ownership of wealth should be democratized and benefit the vast majority of the public directly.

These wealth-democratizing experiments come in a variety of forms. He explores them in part II of the book. I’ll briefly touch on the trends and examples that stood out for me.

The idea of workers directly owning and managing their own affairs without bosses has been a mainspring of much leftist thought. A fact rarely (if at all) publicized in mainstream discourse is that it’s institutionalization in the US has reached unprecedented levels. Alperovitz examines forms that range from a) partial employee ownership with maintaining the dominant corporate division of labor to b) complete employee ownership and worker (democratic) management.

Employee ownership has largely grown through employee stock ownership plans (ESOPs). ESOPs involve receiving and holding corporate stock on behalf ofits employees. “The number of ESOP-style worker-owned firms,” Alperovitz writes, “increased from 1,600 in 1975 to 4,000 in 1980, to 8,080 in 1990, and . . . to roughly 11,000 in 2003. The number of worker-owners involved rose, correspondingly, from a mere 248,000 in 1975 to 8.8 million in 2003.” Strikingly, “more Americans now work in firms that are partly or wholly owned by the employees than are members of unions in the private sector!”

In addition to worker ownership, Alperovitz explores community ownership models. For example, Community Land Trusts (CLTs) are non-profit corporations that operate based on the principle that the “appreciation of land should be turned to public advantage.” CLTs have been established to develop and own housing, as well as land leased for housing, particularly in neighborhoods where development is driving housing and rent prices beyond what lowincome residents can afford. In this way, they protect against the ravages of markets, including foreclosures.

He also explores initiatives implemented through Community Development Corporations (CDCs). CDCs are non-profit organizations that have helped to rebuild local economies through developing residential and commercial properties, which can be owned and controlled by the local community. One example that stands out is the Dudley Street Neighborhood Initiative in Boston. It won the right of eminent domain to acquire over 1,300 abandoned properties, “a unique development in modern urban policy,” according to Alperovitz. Since the time of writing, the initiative has brought together CDCs and a comprehensive CLT to transform vacant properties affordable housing, parks, playgrounds, community centers, and more.

Alperovitz explores larger wealth-democratizing innovations at the state level, such as public ownership of port authorities, public pension funds (like the Retirement Systems of Alabama), and the Alaska Permanent Fund, which gives Alaskan citizens direct stake in oil development in the state. Crucially, Alaska is the only state that recorded a decline in income inequality during the 1980s and 90s. Alperovitz cites research by Scott Goldmist, a University of Alaska economist, who credits the Permanent Fund as playing an important role in this achievement.

The examples cited here are a tiny sample from the "extraordinary explosion" of wealth democratizing initiatives. They also include alternativs to Wall Street financial giants, such as credit unions (member-owned financial institutions).

MOVING FORWARD

Last fall, Occupy movements around the country initiated an action that illustrates how progressive activists can reinforce these initiatives in important ways. On November 5, 2011 the Occupy movements organized “Bank Transfer Day.” According to Alperovitz in a December 2011 article published in TruthOut, “nearly two-thirds of a million Americans joined credit unions in the brief five weeks between the beginning of October and . . . November 5,” and “he mass movement created $4.5 billion in deposits.” The success of the action suggests, in his view, “that many Americans may be quietly beginning to get much more serious about wanting an economy owned and managed on a more democratic basis.”

The success also demonstrates the ability of large-scale progressive activism to do more than raise public awareness of the destructive impacts of elite concentrations of wealth and power, neoliberal economic policies and austerity measures, and so on. Both advancing the principle that wealth should be democratized and benefit the masses and articulating the principle’s moral and political implications, strengthens and sharpens the “elite-targeting strategy” that has been pursued by the Occupy movements. And as illustrated by the “Bank Transfer Day” action, integrating the principle into strategy and tactics resurrects an idea that elites work tirelessly to drive out of popular consciousness: that there are alternatives to the dominant (state)capitalist institutions.

To be clear, the message in America Beyond Capitalism is not to abandon traditional reform measures and unions. Rather, the challenge put forth is to develop a “coherent new strategic direction” through the creative integration of: "(1) traditional liberal reforms to the extent feasible, with (2) growing populist anger and movement agitation aimed at corporate power, the extreme concentration of income , failing public services, continuing ecological decay, and military adventurism, with (3) an explicit approach that aims self-consciously at slowly building the new institutional basis of a more expansive democratizing politics."

Perhaps the evolving Occupy movements and their offshoots present an opportunity to develop this new strategic direction, particularly its progressive movement component. If so, then the prospects for overcoming the systemic crisis and building a more equal, democratic, and free society may be improved, even profoundly.

Stephen Roblin is a Baltimore-based activist and writer. He is a member of the Indypendent Reader collective and the International Organization for a Participation Society (IOPS). He also teaches a bi-weekly writing workshop for Baltimore's new street paper, Word on the Street. Roblin's writing focuses on US foreign policy towards the Horn of Africa. He has written for ZNet, ZMagazine, Truthout, and other publications.