As our demands grow bolder—true full employment, the rebuilding of the social safety net starting with Medicare for All, an overdue green and just transition—so will the naysayers’ inevitable refrain: “How will you pay for it?” This Left Forum panel on June 5, 2018 moderated by Gar Alperovitz brought together the speakers listed above. They show a way out of the austerity trap and reveal that the obstacles to bold action at a national scale on jobs, healthcare, and climate are political, not economic. This is a partial, edited transcript.

Gar Alperovitz: One of the things that’s happening around the country, as you probably know, is  there’s an upsurge of interest in the idea that the banks ought to be under public control. There are public banking initiatives in something like 30 or 40 cities and a couple of states around the country. There was a forum on this  only six years ago promoting the idea. We’re seeing all over the country a very, very fast pick-up on this, including in Los Angeles, Washington D.C. and several other cities. State legislation pending in Michigan and Washington state.

The subject we’re going after today is probably the other piece of the puzzle, monetary policy and money, because there’s a revolution going on in that area as well. It’s not simply the establishment of public banks, but actually getting down to how money works, a subject that has been obfuscated for many, many decades.

We’re going to go into how the revolution is emerging very, very fast on the ground as well as in theory.

Our first speaker, Stephanie Kelton, is currently a professor of public policy and economics at Stony Brook University. She was also chief economist on the minority staff of the Senate Budget Committee. More important, she was the key economist behind Bernie Sanders’ presidential campaign, so we’re delighted to have her. She is also one of the leading experts in this field and getting a lot of attention, deservedly so, for not only for opening a way to rethink monetary theory or monetary practice, but for explaining it to the public in serious terms.

The ‘pay-for-it’ trap

Stephanie Kelton: I’m going to try to focus my remarks on three broad topics. I’m aiming at a progressive audience obviously, but honestly I give a version of this exact same talk most of the time to conservative audiences. The response that I get in those audiences, it would surprise you probably, is extremely positive.

What is it about what I’m going to say that can resonate both with audiences like this and with a very fiscally conservative audience? Let me jump in and we’ll see where this takes us.

This is just to tell you the kinds of things progressives are up against when they propose a big, ambitious agenda.

Bernie Sanders runs for president on the most ambitious agenda I have seen in my lifetime. Hillary Clinton publishes in her book a bit of an exchange she had with someone who said, “Man, it’s awful. Every time we propose something, he goes bigger. We say we want debt-free college. We want to help make college more affordable. He says, ‘Let’s make it free.’ If we say we want to make health care more affordable and increase access, he says, ‘Let’s just make it free.’ Every time we propose something, he goes bigger.” In this exchange that is included in her book somebody said, “This is like Bernie saying, ‘I think America should get a pony.’” Hillary, the fiscally responsible voice in the room says, “How will you pay for the pony?”

It’s the idea that all of this stuff is so grandiose that it’s beyond reality. This is what we’re up against as progressives, putting forward a bold agenda.

This again is Hillary Clinton, from years before the 2016 campaign, when she’s a senator. She’s talking about the reality of being in Washington D.C.She says, “The reality is you cannot cut taxes or increase spending unless you can pay for it.”

What she’s saying is, and I worked on the budget committee, if you propose to do something, you’ve got to show people how you’re going to pay for it. If you want to cut taxes or you want to put more money in education or infrastructure or defense or anything else, you’ve got to show where the money is going to come from. A congressional budget office has to take a look at it. Things are supposed to be done in a deficit-neutral way so that you’re not adding to future deficits so that you’re not increasing the size of the national debt.

Okay, so Senator Sanders gets accused of putting forward a big proposal and not paying for any of it, right? Everybody “knows” that. That was the accusation, but that wasn’t the reality. He actually attempted to play by Washington rules, which are you’ve got to pay for the stuff you want to do. If you go down his agenda, every item on the agenda, you could really draw a line from what it was he was proposing to the source of revenue that was supposed to pay for it all, whether it was Medicare, infrastructure, making public colleges and universities tuition-free. If you actually looked at what he proposed, it was paid for in the conventional sense of the word.

Now, obviously if you have to find the money, as Hillary Clinton says, then where do you look when you need money? Who’s going to pay for stuff? Who’s got the money? Obviously the rich people have the money. It’s a natural place to look when you’re trying to find the money to pay for a big ambitious agenda. You go for the billionaire class or you go for Wall Street, and you say Wall Street will pay.

If it’s making public colleges and universities tuition-free, which was one of the things he proposed, the pay-for on the other side of that was a tax on Wall Street speculation. You’ve all heard this probably 100 times.

How do you pay for a progressive agenda if these are the constraints because this is the current narrative? This means that you have to fight two battles. You have to fight for the agenda that you’re fighting for, and you have to sell policies on their own merits, and you simultaneously have to wage war on another front, which is you have to fight to raise the revenue. You have to get people to vote for the tax increase, for the closing of the loopholes of whatever it is that’s giving you the additional revenue. You’re waging two battles when you do this. My spending proposal is this, and here’s where I propose we get the money. This one can’t happen unless and until this one happens and you have success on the revenue front.  It actually means that you are in a very real sense dependent upon the rich because you can’t feed a hungry kid, you can’t fix crumbling infrastructure, you can’t provide health care for all, unless and until you can claw some cash away from the people who have it. You need their money. It makes you dependent upon the wealthy.

I think progressives should ask themselves, “What is the purpose of tax?” If your instinct, if your impulse is to say to pay for the stuff we want, my suggestion is you’re doing it wrong.

Rethinking taxes

In the 1940s, the New York Federal Reserve Bank was headed by a guy named Beardsley Ruml. He wrote this really important piece in 1946 called “Taxes for Revenue are Obsolete’” What’s he saying? I don’t know that I need to read the whole thing, but he says basically the need for the government to raise taxes in order to remain solvent and run its affairs is completely yesterday. We don’t do that anymore. Why? Because we have a central bank and because we went off the gold standard. The fact that we changed the monetary system in this fundamental way opens up space for us to do stuff we couldn’t do before when we had to find the money.

You’re trapped in a gold standard framework when you’re operating in this frame of mind that money is this finite thing that exists somewhere, it’s physical and you’ve got to find it, and you’ve got to go get it in order to spend it. Ruml says, no, no, no, that’s not how it works in the modern era – by the way, modern in the 1940s, and we still haven’t caught up with this reality.

Ruml goes on to say the purpose of the tax is not to fund the federal government. The purpose of the tax is multifold. One important thing it does is it allows the government to remove some money from the economy so that you don’t overheat the economy through government spending. In other words, taxes help you keep a lid on inflation. If you just spent money into the economy but you didn’t tax anything back, you’d run the risk of overheating the economy, causing an inflation problem.

Another thing taxes do is affect the distribution of income. You lower taxes on some folks, they end up with more take-home pay. You raise taxes on others, it takes the money away. You impact the distribution of income. You use taxes to incentivize or disincentivize behavior. A carbon tax is a good example. You don’t want as much pollution. You don’t want certain activities taking place, put a tax on it. You want to encourage certain other things like people driving electric cars, give a tax incentive or some form of a subsidy to encourage that.

The last one is he says you might want for some reason or another to have a line item where you can keep track of a certain program, like for example Social Security or the Highway Trust Fund or something like that. Taxes do a lot of stuff that’s important. What they don’t do is provide the government with revenue that it needs in order to operate.

Go back to this picture. You don’t tax the rich because you need their money in order to feed a hungry kid or fix a crumbling bridge. You tax the rich because they are too damn rich and extreme concentrations of wealth especially, but also income, are bad for the functioning of the economy, are bad for democracy. That’s the rationale for taxing the rich. Not because we can’t do other things unless we get money from them to pay for it.

You tax Wall Street speculation because you want to discourage certain behaviors, not because you need their money that you raise from a financial transaction task in order to pay for free college. Think it through. Suppose you said, “We’re going to make public colleges and universities tuition-free in the US. It’s going to cost about $70 billion a year to do that.” Now, to pay for it, we’re going to put a tax on Wall Street. Every time somebody buys stocks or engages in derivatives trading or bond trading, they’re going to pay a small transactions tax. That’s our tax.

Now, you simultaneously have said you want to break up the banks, you want to make banking boring, you want to shrink the size of the financial sector, and you have made yourself completely dependent upon what in order to fund your education proposal? Wall Street speculation. Not only do you need Wall Street to continue to speculate, but you’re going to need them to do more of it over time and grow because of the amount of money need to pay for college and university. You don’t want to hitch your wagon to the very thing that you loathe and are trying to shrink as part of your overall economy. There is a rationale for doing it, right? That would be to discourage certain behaviors, not to fund programs.

The household fallacy

My argument is that when we think about the government’s financial operations we tend to do so with reference to our own. We think of the government as a household. I say, “Well, I can’t go on spending more than I take in year after year and borrowing. I’d go broke.” This is a huge mistake, and if progressives do it, they need to stop it right now. The federal government is nothing like the household. The federal government plays by a completely different set of rules compared to all the rest of us.

If we want to go out and buy a car tomorrow, we have to have the money in the bank or be able to prearrange the financing. The dealership is not going to let us drive off the lot with a car until we have security financing to pay for the car, right? What we think is that the government prearranges its financing – the T.A.B. or “taxes and borrowing”; it collects taxes from the rest of us, it engages in borrowing when it sells bonds. It arranges the financing. It raises the revenue. It has money and now it goes out and spends. The spending comes last.

That’s completely backwards. What happens in reality is the federal government – the House and Senate – get a budget together. If the budget passes, there’s an appropriations process. It is through the appropriations processes that the budget authorization for government spending is triggered. That’s how the government pays for everything. We spend first, and the taxes and borrowing are secondary. The rest of us can’t do this. Money matters.

The fact that the federal government has control of the U.S. dollar, creates it, issues it, and is its sole source, means it can never run out of money.. You can try to create it, but you’d get arrested for counterfeit. You can’t do it. You can’t create high-powered money. The government’s money is special.

How should progressives answer the question, “How will you pay for it?” It’s a trap. Don’t fall into this. What they’re really asking is not how will you pay for it but who will pay for it. The question is designed to name the enemy. Who’s going to be footing the bill? In other words, who’s paying the T.A.B.? Don’t answer that question.

The bottom line is all this pay-for stuff is built around the idea that deficits are bad. They aren’t. Dr. Evil told us a long time ago that deficits don’t matter. Well, it turns out they do, but not the way we usually think about it. Deficits matter, but not because they add to the national debt, burden future generations and all that kind of stuff, create instability in the economy. Deficits matter because the government’s deficits become surpluses somewhere else in the economy. Guess what? Dick Cheney knows it and the Republicans know it. How do I know that? Because they just passed tax cuts that will add $1.5 trillion to deficits over the next 10 years. Why did they do that? Because they know that when a government is increasing its deficit somebody else’s surplus is going up, and they know exactly whose surplus it is. They’re using the budget deficit to channel financial resources to the people they are trying to help. Democrats or Greens or whoever could be using budget deficits to channel financial resources, infrastructure, real things, to the people they’re trying to help.

How should progressives talk about money, debt and taxes? Don’t repeat this stuff about taxes paying for federal government programs. It’s not taxpayer money. This is the wrong frame. Don’t talk about the debt as if it’s something that we owe. It’s something that some of us own. You may have treasuries. Mostly they are concentrated in the hands of wealthier individuals. Don’t talk about government money as if it’s something that the government needs to get from us. They’re the source of the money. We get it from them. They don’t need it from us.

An economy on FIRE

Gar: The next person is going to give us the next step. Michael Hudson is the distinguished professor of economics at University of Missouri, Kansas City. He’s also a research fellow of the Democracy Collaborative. Michael has been in this for a long time. Michael, take it away.

Michael Hudson: My first discussion of modern monetary theory really was in Canada 40 years ago. I was the financial advisor to the Canadian government. At that time the big problem from Canada was how provinces would get enough money to build infrastructure. I’m going to talk a little bit about that because it’s the same problem that the United States is facing today. You can understand it, I think, more clearly in the international sense.

There are two ways of financing infrastructure. One would be if the government, the Bank of Canada, which was more than any other bank able to create its own money, spent the money into the real economy for infrastructure. The banking lobbyists – I won’t call them conservatives; they were radical reactionaries and lobbyists for the banks – said, “Look, if the government creates the money, you’ll have to borrow it, and you’ll have to pay 5 percent, 6 percent, but you can save half a percentage point by borrowing German marks or Swiss francs.”

This was Trudeau’s liberal government, and you can’t get more right-wing than the liberals in Canada. What they did was they borrowed billions for Deutsche marks and Swiss francs that were turned over to the government central bank. What did the government do? All this domestic spending in the real economy was in Canadian dollars to hire Canadian labor, to buy Canadian goods and services, to build the infrastructure.

My point was, why do you need Swiss francs and German marks if you’re going to create dollars? The Swiss francs and German marks ended up in Canada’s central bank as its foreign exchange reserves. What did it need these reserves for? If the government is going to create the money as a result of this borrowing abroad, why have the foreigners?

Well, the answer from the banks was you need the foreign banks as an honest broker because they’re responsible. In literature, you think of bankers as being responsible, but they’re really not responsible. What happened after 1979 was that the Canadian dollar went down from about $1.06 into the $0.80s. The Swiss franc went way up. The German mark went way up. The result was that Canada had to pay a 50 percent premium on the capital as a result of having the banks work as the honest broker for them.

None of this was necessary. The government could spend it into the real economy. The problem is the private sector is not just the real economy. The private sector also is the FIRE – finance, insurance and real estate – sector. You can see today the ability of the government to spend money into the economy through the Federal Reserve’s quantitative easing, technically bailout money to subsidize the finance, insurance and real estate sector. This is considered to be noninflationary.

Who gets to create money

You have to ask, what kind of inflation are people talking about? When they talk about government spending into the real economy and running deficits, they say there will be price inflation. What they really mean is wage inflation. What they want to do is keep wages down. When they talk about inflation of prices, they really mean living standards going up. We don’t want that, do we, because we call that consumer price inflation. We don’t call that rising living standards. The fact is, there’s a disconnect. There’s no reason why consumer prices should rise when wages go up. There’s a disconnect with the largest increase in prices that we have today, whether it’s housing prices and rents, as you have in New York, or medical care.

The government is able to create money now for the financial sector, but there is this patter about why you can’t run a deficit for the domestic economy. Now, what is true for Canada is exactly what Stephanie has explained for the United States. Banks can create money simply on their computers. If the rich people lend this money to be spent, how is the price effect any different from the government simply creating the money? The effect is exactly the same. That’s what they don’t get. You don’t need to borrow to spend into the economy at all. It’s a science fiction story, a parallel universe, as if the governments are somehow dependent on the banks.

All this developed about 100 years ago when the Federal Reserve was created in 1913 and ‘14. Before that, there was a crisis in the United States in 1907. Congress had maybe 18 volumes of national monetary commission reports. One of the volumes explained everything that the Federal Reserve had done, creating money, moving it around 12 districts, pumping it into the economy for the autumnal drain when you have to move the crops. All of this was done by the treasury. The difference is that the treasury was controlled in Washington. I have on my website from an Indian journey all of the documents of how the Federal Reserve was created, essentially to take control of the money supply out of Washington and distribute it to the banks in the various Federal Reserve districts.

You have a whole political fight between the FIRE sector and the government sector. You can only understand this fight by looking at the politics of it.

Unforeseen financialization

The fact is that Karl Marx was much too optimistic about the financial system. His volume three of “Capital” was all about how finance tended to grow and extract more and more from the economy. The FIRE sector today essentially funds real estate. It extracts rents. It raises prices. It backs great monopolies. Banks don’t create money into the real economy basically. They create money to buy companies, divide real estate already in existence. They transfer wealth, but they don’t really produce.

I’m working with Gar’s group to re-describe how the gross domestic product accounts. We actually treat the FIRE sector, finance, as a subtraction from gross domestic product, not an addition to.

Getting back to Marx, Marx expected in the late 19th century that the historical destiny of capitalists, he wrote, was to take banking and money creation out of the feudal stage, out of the medieval European stage and industrialize it and essentially move towards public banking. The whole 19th century was doing this. There are three volumes of the national monetary commissionary report on the right spot for the large German banks and how German banks were working hand in hand with government to finance industry. The Bank of Canada was formed during this time.

Things had not worked out that way. World War I changed everything, and now you have instead of industrializing finance, you’ve had a financialization of industry. What you’re having instead of the government spending into the real economy, it’s starving the real economy.

What happens when a government doesn’t pump money into the economy? That means there are only two sources. One source is international. You borrow the money abroad in a foreign currency that you’ll have to repay at a currency risk. The other source is domestic; you borrow from the banks or you let the banks pump the money into the economy. The problem is the banks don’t pump the money into the economy. The banks only lend essentially for the real estate, corporate raids, corporate loans. They even make loans to corporations to pay dividends. The beneficiaries are the 1 percent or the 5 percent.

The real question of the budget deficits or modern monetary theory is who’s to get the benefit of the money? Will it be the 1 percent or will it be the 99 percent? The answer can be increasing the flow of funds, and the flow of funds, who gets what will make it very clear. Who gets the result of the government spending in forms that do not take the form of a deficit or if it runs the deficit, is it into the real economy or the FIRE sector? You need to divide the private sector into FIRE and into the industrial, agricultural and infrastructure.

Gar: Let me say, I suspect there are people out there, because I’ve done this myself several times, who hear the words ‘the banks will create the money’, and that doesn’t ring straight for most people, that money is actually created. Those questions, I’m sure, are going to hang in the air into which modern monetary theory has the answers. I want you to understand that.

Another way to think about it, although we can easily get into a trap about taxes here: When the government wants to run a war, money does not seem to be a problem. It creates money when it wants to, and it taxes back some of it if it likes to. By way of comment, having talked to a number of folks, the word ‘create’ kind of gets in the way sometimes if you’re not economists.

Fear of a job guarantee

Our next speaker is Pavlina Tcherneva, an associate professor and chair of the department of economics at Bard College and a research associate at the Levy Economics Institute. She’s led the way in showing very, very practical applications of the theory.

Pavlina Tcherneva: Thank you. You are all, I’m sure, familiar with the seven deadly sins. Today I would like to address the seven deadly fears of economic policy. Mostly I’d like to address and face those fears and how to defend a progressive agenda, whatever that may be.

The policy proposal that I’ve been working on for 20-odd years is an employment program that has become known as the job guarantee program that has recently entered the mainstream conversation. A number of senators and representatives have endorsed the program. There are lots of versions of the program out there, but it is a recognition that the government has a responsibility to do something about the persistent problem of unemployment.

What I’d like to do today is basically address some of those seven deadly fears. As the program has discussed, there’s a lot of response, both on the right and on the left, and a lot of it is quite alarmist, frankly. I’d like to ease our fears by addressing each one of them.

First, what is the job guarantee? Essentially, it’s a public option for jobs that offers decent work at decent pay. The public sector acts as an employer of last resort, if you will, when people seek work and they’re unable to find good work at decent pay.

It is a permanent program. The unemployment problem is an ongoing problem, and thus, this program is a standby option for jobs. It’s federally funded but locally administered. It’s voluntary. Nobody is asked to work for their benefits. It’s open-ended. You can go to the unemployment office, and you seek work. There will be a list of options for you. The way we propose it is that those list of options will largely focus on public service and the neglected areas of public sector work. It’s open to all people irrespective of their labor market status, race, sex, color or creed.

The way I think of this program is that it’s an employment safety net, the way we have safety nets for various other problems. If the problem is that you don’t have retirement insurance, we guarantee it; we have Social Security. If the problem is access to food, we guarantee that there will be access to food.

It’s also a transitional program where people essentially get their starter jobs if they need to. They get their stepping stone. They enter into this program and then transition out of it if they so desire.

Overcoming the spending myth

Let’s discuss the fears. The first one that we normally have to address is the fear of spending. It’s based on a deep misunderstanding of what money is and what it does. Again, Stephanie explained how normally there are images that are conjured in our mind that, “Gee, my hard-earned money. I’ve been saving it, and now the government wants to tax it away from me so that it can pay for these policies. Who knows if they’re going to be good or bad?”

We just need to give up this myth of the taxpayer money because this is not how actually the public sector spends. I want to add one other purpose of taxes to the list that Stephanie provided: taxes create demand for money; for the dollar, in a sense. Just think of it this way: If the government tomorrow decided to tax you in Canadian dollars and April 15 you have to deliver Canadian dollars or euros, what will you ask your employer to pay you? Will you ask them for dollars or will you ask them for euros? The tax in this coercive way, if you will, creates demand for the very thing that the government issues: the dollar. The reason is the government needs to be able to spend something that we value to be able to fulfill its various public service objectives.

Here’s one way of thinking about it. The government is the monopoly issuer of the dollar. It is the ultimate source of dollars. Unemployment in a way is people seeking dollars but not able to find them. Whatever the other arguments for addressing the problem of unemployment, and we can discuss that, there is one key aspect to this problem. It is that there is only one sector that can actually choke up the demand for dollars. There’s only one sector that can actually provide it to those who need it, and that is the public sector.

Another piece to the story is that the unemployed are already in the public sector. The government is already responsible for the unemployed. We do the right thing. We provide unemployment insurance, as inadequate as it might be. We provide various other income supports, even though those programs are also underfunded. We have this understanding that we have to provide for people who don’t have access to decent employment or decent incomes.

We provide a slew of programs, but we don’t provide the one that many people need, and that is employment. We are not only responsible for the unemployed, but we also bear the costs of underemployment poverty. If you think of virtually all social, economic and political problems, in one way or another they are connected to communities that have lost their economic life, people who have lost economic opportunities. The distress that families feel not being able to provide for themselves. These are large invisible but very real costs that we already bear.

The fear of spending is the first fear that we need to debunk. This is a bit of an esoteric point, but I want to put it out there. If the government sector is the monopoly issuer of the currency, and it provides the currency in exchange for employment in the public sector, public sector work, then there is an exchange. We establish some sort of baseline value for that currency. We anchor the value of the currency and labor power. We know exactly what it is worth. It is worth $10 or $15 for one hour of publicly useful labor. In a sense, it’s our gold standard. It uses not gold, but it uses labor to anchor the value of the currency.

Big numbers and big government

The next fear is the fear of inflation. I think that that is really the fear of big numbers when we estimate what a job guarantee would cost. We have a proposal that you can find at the Levy Institute website that estimates a job guarantee would cost between $300 billion to $500 billion a year to employ 50 million people. A lot of people have said, “Oh gee, this is an enormous program. It’s going to be very inflationary.” Is $300 billion really inflationary? The Department of Defense, including the war budget, is about $900 billion. Social Security is upwards of $1 trillion. Medicare is $700 billion. Medicaid is $600 billion.

Somehow $300 billion is supposed to generate this massive inflation that will erode the value of the currency. This is not really the problem. A lot of people are actually worried that this actually might push up wages, that it might actually provide wages at a decent living level. We understand that the job guarantee will be the effective minimum wage for the economy, so why would you work for $7 an hour if there’s a public option of $15? The private employer has to match this. We have modeled this, and we find negligible impact of this very bold program on inflation.

The other thing that virtually everybody misses in this discussion is that a one-time adjustment in prices and wages across the economy, across the board, is not inflationary. Inflation is when prices keep going up. If the wage goes up from $15 to $16 to $20 to $25 to $30, then the private sector will have to match it. Yes, that will be inflationary, but no, we are anchoring the floor. We are raising the floor, and we are anchoring it at $15.

The second piece that everybody misses is that the job guarantee actually shrinks when the economy is growing. When the economy is growing, when private employment is growing, when there are ”inflationary pressures” in the economy, the program shrinks. Actually, it’s a dampening effect on inflation, not a fueling effect to inflation.

There’s a fear of big government, of course, but most people ignore the fact that we already have big government. What I already pointed out is that government has devoted enormous amounts of financial and real resources to deal with the fallout from unemployment, underemployment and poverty.

In this sense, the way to think about this is that the job guarantee actually reduces the costs of unemployment.

Whatever you discuss, whatever your policy priority is, always separate the financial cost from the real cost.

When you defend Social Security, don’t fall into the trap of this discussion of how will we pay for it. The question is what would we do with a whole bunch of people who are retiring who don’t have the goods and services that they might require to live a decent life. It is not a matter of financially providing for them but providing for them in real resources.

It’s the same thing with unemployment. It’s not the problem of paying for unemployment, but the problem is, do we really want to maintain this paradigm of neglect, of abandoning our public spaces, of abandoning our public purpose, of allowing people to suffer all the consequences that come with unemployment.

Double standards

There’s also fear of the administrative burden. This is a unique double standard that the job guarantee faces. We never hear that we can’t go to war, we can’t engage in nation-building because it’s going to be an administrative nightmare. The job guarantee uses the existing institutional infrastructure to simply expand the number of jobs out there.

Is it really so difficult to employ 50 million people? Is this really the biggest problem that the government is facing? Well, public education serves 50 million students. Nobody is saying we have to take it away because it’s an administrative nightmare. Social Security, 50, 60 million people. Medicare 44 million. Medicaid 70 million. Yeah, it’s easy to sign a check, but all of this involves a fair amount of administration, and we don’t discuss these.

Fear of boondoggles. This was the fear during the New Deal that somehow the government is going to create bad jobs. Well, just go to the Living New Deal map, and you will find what we did and the legacy that we left. Don’t fall into the trap of productivity. What’s the productivity of these jobs? It’s a natural impulse to say, “But what will people really do?” I can give you a very long list of what they can do. Good useful jobs. The way to answer this question is what is the productivity of the unemployed today? It’s negative productivity. You have malnourished children that go to school because their parents don’t have income to provide for them. That is the productivity you need to be focusing on.

Finally, there’s the fear of political revolution. This was raised by Robert Samuelson in The Washington Post. He says, “Imagine people who work in the private sector who suddenly realize the public option provides Medicare and child care, and they don’t have it. This is going to be enormously disruptive to the business as usual model.”

Look, in information technology, disruptions are considered great, right, progressive. In public policy, disruptions are awful, terrible. This is a defense of the status quo. It is the defense of a model where firms are only profitable when they pay poverty wages. We don’t want to defend this model. We want to disrupt it.

Finally, I think all of this amounts to pure change, but Americans are really not so afraid of it; a recent survey showed that the job guarantee had overwhelming support, and even in deep red states upwards of 70 percent of respondents supported it.

Those of us that have been working on this project are very encouraged, excited that it is in the mainstream, but my cautionary note is that we put way too much on the shoulders of the job guarantee. We have had decades of neglect of the public sector. We have enormous environmental challenges. We are suddenly putting all of these problems on the shoulders of the job guarantee and saying, “Hey, look, see, this is the program that will solve these problems.” It will not.

This program provides jobs for all. This program is a very crucial piece of the progressive agenda, but we need so much more than that.

Rethinking the monetary system

Gar: I want to introduce Raúl Carrillo, who’s the staff attorney at the New Economy Project and a member of the board of directors at the Modern Money Network, and he’s going to talk about actual on-the-ground projects that he’s working on and how they relate to this theory.

Raúl Carrillo: What I’m going to try to do, depending on your opinion, is synthesize or bastardize some of the ideas that were just presented by three of my heroes here and articulate those in a language that is useful, I think, to organizers, activists, people who are in this economy trying to heal the wounds, trying to take care of other people, trying to actually introduce some of these intellectual paradigms to work on the ground.

I’m particularly going to focus on two movements that I’m a part of. The first is the Modern Money movement. I’m affiliated with a number of modern money organizations, but principally Modern Money Network, which a few of us started several years ago when we were law students at Columbia and activists. We started thinking how does this kernel of what we consider to be factually correct analysis of the economy connect to law, organizing, technology, all these other things? How can we build bridges? How can we create packages that are useful for activists and organizers to use?

Over the last five years or so we’ve held about 70 symposia in the United States, United Kingdom, Germany, Australia, Brazil and a few other places, trying to connect MMT (Modern Monetary Theory) to other things.

The other one is that I work for the New Economy Project, which is a 20-year-old nonprofit here in New York City, and we do two things. One is we fight corporate power. I personally operate a financial justice hotline where folks can call when they have problems with banks, debt collectors, landlords, etc. They come to the office. We try and help them out on a very individual level. We also bring some impact litigation.

The second thing that we do is community economic development. We try to build community land trusts, financial cooperatives. We work with co-ops, all the good stuff that I know a lot of people in the audience are involved in already.

What is “the New Economy movement”? The essential idea is we’re trying to move out capitalism, but we have a very, very strong focus on environmental sustainability. The production system with FIRE (finance, insurance and real estate) on top of it, as Michael mentioned, is tricking us, so how do we get out of here?

The New Economy Project has a particular focus on something called the “just transition,” which arose in the 1980s and 1990s. The idea here is that we don’t just want to go to an economy that’s more sustainable. Along the way we want to heal some of the wounds that have been caused. We want to help people who face the biggest threats from ecological disaster. That means a particular focus on racial justice, gender justice, all the various forms of social justice that need to come along with a push to an environmentally sustainable world.

How does Modern Monetary Theory help? I’m actually going to borrow a quote from one of the organizers of this panel: ‘What MMT and PK theory does is it concentrates our minds on the real limits, on the real things we need to make more sustainable.” That means we’re focusing on the real: What’s happening to people, what’s happening to communities, what’s happening to the planet.

The dig-burn-dump economy

If we’re talking about an economy with limits, money is not necessarily the enemy. In fact, a lot of MMTers agree. A dear friend, Fidel, often says our economy runs on waste now. One of the fears, fear of waste for the job guarantee, fear of financial waste, fear of fiscal waste. That’s nothing. We make that stuff. It’s a legal construct. It’s a social construct. Really, the problem is when money is used to burn up a planet.

This is how an environmental justice group in Oakland called the Movement Generation Justice and Ecology Project describes the process that the industrial production system applies to our planet and thus to us: We dig up resources, we burn them, then we dump the waste, we churn it up.

Not only does the industrial production system do this to nature, but the financial system does this to people. FIRE burns people. It’s right there in the name.

What does the FIRE system do? It converts a participant in the economy, you or I whether in our capacity as a worker, a tenant, a borrower, a debtor of some sort, and it turns us into nonrenewable participants. It treats us like it can draw money out of us and then discard us, whether that’s in a place of employment, whether that’s in the credit system. It treats us like we’re disposable. We are waste.

How did we get here? Again, lots of different leftist stories on how this is done, but I think that MMT adds a particular element to this. We all know the story of enclosure, property rights, etc. People become dispossessed. They become part of a labor force that is roving. We don’t have property. We can’t work just for biophysical resources. We can’t just find some land and grow some food, even if we wanted to. We have to pay taxes. By taxes, what we really mean is any kind of fines, fees, obligation with the state. That means the fees you get for walking while black in Ferguson. That means student loan interest. That means a wide variety of things.

The point is the system is set up so we have to get money, and people take advantage of that. Now capitalists are not only trying to control the means of production. They’re trying to control the means of the means of production, the FIRE system, as well as the industrial production system.

How does this system keep going? It acts like the money comes from the users, from the resources that are being used rather than by the system itself. We talked about the taxpayer money frame, how that’s particularly harmful. When we think that the money to keep a machine running has to be extracted from people, we get some really terrible political dynamics.

The other lie is that banks are just either making money wildly or they’re using our deposits and turning back around and the banks rely on us. I would say that the banks are rogue public utilities. They have been chartered by the government, licensed by the government, regulated by the government, and they’re out here not doing their job. When we talk about pushing them to do particular things, we have to recognize that it’s even worse than we thought. They’re powerful. They have the money power. They can create and generate credit at the point of lending. They can do a wide variety of other things that are very, very terrible.

Austerity makes room for financial extraction. If the government is not putting money into the economy, the banks are controlling the borrowing process, and we’re all going to die if we don’t stop it.

Money doesn’t grow on rich people, not on wealthy taxpayers, not on banks. What we want to do is get the money power away from the banks, away from rich people by making claims on the state. You’ve got that giant piggy bank, call it what you will, money can come out of the state. Monetary sovereignty means that you can spend on people, on planet, on communities.

The way that we stake our claim and make the state do that is we establish rights to the things that we want. Then the dynamics for fiscal spending become repooled. We pull money out of state coffers, depending on how much we need based on each eligible individual instead of waiting for whoever in Congress, rich folks, to write that check and change the dynamics.

Basically what we’re talking about here is that MMT allows activists and people to, once they establish rights, pull money out of the system rather than wait for them to push.

What does that mean for activists, for organizers, for leftists? We’re establishing rights. We’re marching for jobs. We’re marching for various other freedoms. We want the entitlements. Fiscal austerity is the enemy even though we might want to be austere towards nature and other sorts of respects.

The plant-nurture-thrive alternative

Now I’m going to go out on a real, I think, new limb here. I’m going to suggest that MMT combined with a new-economy focus on environmental sustainability can take us away from the dig-burn-dump model and into a plant-nurture-thrive model.

Plant. We establish rights with this right to housing, with its right to jobs. We free up space to grow, to pool funding and to have a space outside of the profit motive, even outside of the revenue motive. We can start to do new things within that space. We fertilize the space with more of that sweet, sweet money from the public government. We can start to heal wounds, start to do things more equitably. People from bad sectors will leave to new jobs and a job guarantee. People from bad buildings will leave to new houses and new forms of shelter with the home sprawl movement that’s going on.

I’m just going to do a little bit of implementation here and talk about how MMT can potentially change things. I think that public money for public purpose is awesome, and that’s going to give us a platform to do new things. Eventually, it can be public money for public power. We can do even more. The way that dynamic works is by reversing essentially the dig-burn-dump cycle that we have going on here.

We can eventually move on to even stronger things like unions, to collective bargaining. People leave spaces that are extractive. No one wants to be a part-time prison guard anymore. No one wants to work in fast fashion. No one wants to work in fast food. Not necessarily everybody is going to leave, but it provides people with the opportunity to do so, so we can move again towards a regenerative economy, towards people leaving extractive industries.

Eventually, you can layer on democratic processes into the job guarantee, into the new space that’s been created. Participatory budgeting and worker co-ops can fold into the job guarantee.

Just two more examples of implementation. Extractive finance in housing is dispossessing people, either through the initial capture of land or gentrification. The landlord is in charge. The landlord kicks you out. The landlord doesn’t like you. The landlord segregates people. You get redlined. You get gentrified. You get surveilled by all these crazy consumer reporting systems. Then the threat of homelessness keeps you in line. This is true even for the middle class who’s enthralled to the banks, if not to landlords.

With MMT, what does it look like? You establish a right to housing. MMTers don’t necessarily believe in that, but I do. The point is that you can establish a right. You create a space. Once it’s guaranteed that everyone gets this thing, now you have room to maneuver. The rights pull the money down to tenants. You can have things like social housing projects. Then you can start doing things that are more democratic over time. Community land trusts, mutual housing associations. These things can all be contemplated once we have the funding and public capital. Again, that sweet, sweet fertilizer.

In East Harlem, the New Economy Project is helping to build a community land trust where you take land off the market, the residents own it. These things can be helped by MMT.

Finally, everybody is familiar with the access to credit scenario. I think that in and of itself is a problem that we think that people don’t have enough loans. Really what we want is for people to get more money, for people to get money from the state and from benefits. More people will get higher wages whether that’s through a job guarantee program or something else.

In the instance that people need credit, right now they’d be set with a bunch of predators, whether that’s payday lenders, whether that’s banks acting terribly, whether it’s this new fintech stuff from online, which actually turns out to be just as predatory as the analog version. What you can do with an MMT framework is again, establish public infrastructure. Establish rights. You can do some forms of postal banking. You can do public banking. From then on out the threat of you having to go to a payday lender is gone, so you have room to maneuver. Again, political room and fiscal room. You can start doing things like complementary currencies. You can start doing things like public banking. You can start doing all these more democratic things once the public sector is putting pressure on the private sector and giving civil society room to grow.

As you see here, there is a regenerative model for all of these things. You just need the public money. My friends in Reston, England have a complementary currency program. They generate money, or you could say their own forms of IOUs, which they use in the local community so that people only do business with local business. They’re keeping what they call “clone town London” out of there. These are acceptable in receipt of taxes, which is very interesting.

Finally, Gar mentioned the public banking movement. The New Economy Project and a coalition of other grassroots groups are launching an effort to create one here in New York. The idea there is that the public bank will generate credit to lend to democratic enterprises, ideally we would want federal money, but this is something that is powerful that municipalities can do, and in the process we can highlight a lot of what money really is. It’s a public feature that should be used for the public good, and we can do a lot of political education with this as well as whatever material healing help to organizations throughout New York City. Public money for public power.

Gar: Let me just say one thing. I’m from Racine, Wisconsin. I had an aunt who ran a little tiny Jewish bakery. She used to say, “You know, during the Depression there wasn’t any money around. Then they decided to run a war, and there was all kinds of money around. Why can’t we do that when we want to do that?” That is probably the point.

Photo by kevin dooley

The post Money Matters! Why Monetary Theory and Policy Is a Critical Terrain For the Left appeared first on P2P Foundation.

By Thomas M. Hanna, Joe Guinan and Joe Bilsborough: There is no telling when the next UK general election will come, and when the Corbyn Project could accede to national political power in what R.H. Tawney once called ‘the oldest and toughest plutocracy in the world’. But there is still plenty of work to be done in the meantime. While there were some advances in last month’s local elections, the mixed results underscore the difficulty of mobilisation around a stale and sterile managerialist model of local government, as embodied in all too many Labour councils.

Austerity at the national level may have been eased, at least rhetorically, but a fiscal crisis of the local state still rages. Since 2010, government funding to local authority budgets has been slashed by 49.1 per cent, with more pain still to come; by 2020, cuts in central government funding are forecast to reach 56.3 per cent. Although plans for all councils to receive 100 per cent rates retention by 2019/2020 have been placed on ice, cuts premised on this change continue unabated. Almost half of all councils are set to lose all central government funding by 2019/2020, with a yawning £5.8bn funding gap opening up by the end of the decade. Even with the best will in the world—clearly lacking in places like Haringey, where until recently a ghoulish Blairite zombie local government politics still walked at night—this has not been a promising context in which to build political support for and project out a Corbyn-inflected ‘new economics’.

But difficulty need not be impossibility—as can be seen in the path taken by the flagship Labour council of Preston in Lancashire. In a few short years Preston has gone from being one of the most deprived parts of the country to a model of radical innovation in local government through its embrace of community wealth building as a modern reinvention of the longstanding political tradition of municipal socialism. Community wealth building is a local economic development strategy focused on building collaborative, inclusive, sustainable, and democratically controlled local economies. Instead of traditional economic development through public-private partnerships and private finance initiatives, which waste billions to subsidize the extraction of profits by footloose corporations with no loyalty to local communities, community wealth building supports democratic collective ownership of—and participation in—the economy through a range of institutional forms and initiatives. These include worker co-operatives, community land trusts, community development finance institutions, so-called ‘anchor’ procurement strategies, municipal and local public enterprise, participatory planning and budgeting, and—increasingly, it is to be hoped—public banking. Community wealth building is economic system change, but starting at the local level.

The term first emerged in the United States in 2005, and was coined by our colleagues at The Democracy Collaborative. It was used to describe the model then beginning to emerge in the severely disinvested inner-city neighbourhoods of some of America’s larger cities as a response to crisis and austerity. As federal and state fiscal transfers dried up, social pain intensified in communities that had long been suffering from high levels of unemployment and poverty. Precisely because large public expenditures for jobs and housing were seen to be no longer politically achievable, more and more people started turning to economic alternatives in which new wealth could be built collectively and from the bottom up.

There are now two flagship models of community wealth building—and a growing number of additional efforts in cities across the United States and United Kingdom.  The first model is the Evergreen Cooperatives in Cleveland, Ohio—created, in part, by our own organisation, The Democracy Collaborative. Cleveland had lost almost half of its population and most of its large publicly-traded companies due to deindustrialisation, disinvestment, and capital flight. But it still had very large non-profit and quasi-public institutions such as the Cleveland Clinic, Case Western Reserve University, and University Hospitals—known as anchor institutions because they are rooted in place and aren’t likely to up and leave. Together, Cleveland’s anchors were spending around $3 billion per year, very little of which was previously staying in the local community. The Democracy Collaborative worked with them to localise a portion of their procurement in support of a network of purposely-created green worker co-ops, the Evergreen Co-operatives, tied together in a community corporation so that they too are rooted in place. Today these companies are profitable and are beginning to eat the lunch of the multinational corporations that had previously provided contract services to the big anchors. Last month came the announcement of an expansion of the Evergreen Cooperative Laundry to a new site serving the needs of the Cleveland Clinic, with a hundred new employees on fast track to worker ownership.

The ‘Cleveland Model’ is one of the sources of inspiration for Preston, now the pre-eminent example of community wealth building approaches in the UK. Back in 2012, Evergreen caught the attention of Labour councillor Matthew Brown, now a colleague at The Democracy Collaborative. With the help of others, such as Neil McInroy at the Centre for Local Economic Strategies (CLES), Brown took the Cleveland Model and radically expanded it. The ‘Preston Model’ now encompasses a string of public sector anchors across Preston and Lancashire, to which has been added public pension fund investment, affordable housing, and—hopefully, in the near future—an energy company and a community bank.

A longstanding tradition

Both the Cleveland and Preston Models represent a reinvention of a longstanding political tradition that played a significant role in the development of mass socialist politics in Europe and North America—and could now do so again, just when such a politics is most needed. In the late nineteenth and early twentieth centuries, activists on both sides of the Atlantic began to articulate a sophisticated political-economic theory of change. They suggested that by advancing a radical yet popular economic strategy of democratised ownership, good governance, and better working conditions at the local level, they could begin to build political power from the ground up. “Little by little the conditions of the people are to be improved”, Carl Thompson, a Wisconsin State Legislator and one of the United States’ leading municipal socialists, argued in 1907. “[T]hus, in every way, society will be gradually prepared for and led into the experience of Social-Democracy” (Thompson, 1908, 28). Similarly, in Britain in 1919, the Russian émigré and radical journalist Theo Rothstein asserted that local councils should be transformed “into so many forts from which to assail the Capitalist order” (Rothstein, 1919).

Municipal socialists believed that by pursuing policies and conducting campaigns around economic issues that directly affected the community, they could build durable political coalitions, raise the aspirations and political awareness of ordinary working people, and develop the political and administrative skills for further social and economic transformation (Judd, 1989; Stave, 1975). This coupling of consciousness-raising with the marked material enrichment of everyday life could then be deployed to the furtherance of socialism more broadly—in local, state, and national elections.

Image: The Democracy Collaborative, CC BY-NC-SA 2.0

In the UK, interest in the economic and political possibilities of municipal socialism came and went with the rising and ebbing of the tides of economic reform and mass politics. At the beginning of the twentieth century it was led by early Fabian thinkers, with six Fabians—among them Sidney Webb—being elected to the London County Council in the 1892 elections. Of the first hundred Fabian tracts, written between 1884 and 1900, some forty-three discussed issues of local government (Chandler, 2007, 130-131). In What About The Rates?, Webb’s 1913 treatise on the financial autonomy of the municipalities, he protested vociferously against a political strategy which sought to marginalise the municipal: “Let us leave such proposals to the enemy … We, as Socialists, much cherish local government, and aim always at its expansion, not its contraction” (Webb, 1913, 9-10).

Municipal socialism was thus conceptualised as a consciously-evolving process, simultaneously shifting ownership—and with it power—whilst raising local living standards. Economic and political successes were consciously built upon to expand the strategy both horizontally (to other municipalities and industries) and vertically (to larger enterprises and services, and higher levels of governance). F. Lawson Dodd demonstrated the unfolding logic of this approach in a 1905 tract, arguing that the merits of water municipalisation warranted a further municipalisation of the milk supply on the bases of both power and public health: “The establishment of municipal milk depots supplied from municipal farms is the first step towards the social organisation of the dairy industry … The community would take over the whole of the supply”, he argued (Lawson Dodd, 1905, 17). The full extent of the impressive economic footprint achieved by municipal ownership in late-nineteenth-century Britain is nicely captured in the account given by Webb in his 1890 book Socialism in England:

“The ‘practical man,’ oblivious or contemptuous of any theory of the Social Organism or general principles of social organisation, has been forced by the necessities of the time into an ever deepening collectivist channel. Socialism, of course, he still rejects and despises. The Individualist Town Councillor will walk along the municipal pavement, lit by municipal gas and cleansed by municipal brooms with the municipal water, and seeing by the municipal clock in the municipal market, that he is too early to meet his children coming from the municipal school hard by the county lunatic asylum and municipal hospital, will use the national telegraph system to tell them not to walk through the municipal park but to come to the municipal tramway, to meet him in the municipal reading room, by the municipal art gallery, museum and library, where he intends … to prepare his next speech in the municipal town hall, in favour of the nationalisation of the canals and the increase of government control over the railway system. ‘Socialism, sir,’ he will say, ‘don’t waste the time of a practical man by your fantastic absurdities. Self-help, sir, individual self-help, that’s what’s made our city what it is’” (Webb, 1890, 65)

Tensions soon arose, however, between local and national aspirations. With the rise of Labour as an electorally successful national party committed to a top-down reorganisation of the British economy, municipal socialism began to wither. This was partly the party’s own doing, with one of the deleterious consequences of the centralising tendencies of Attlee’s post-1945 nationalisation programme being the abandonment and erasure of the rich tapestry of local traditions of municipal ownership, mutualism, and co-operation. The boards of the newly nationalised (and centralised) public companies were comprised of a curious assemblage of the contemporary elite, which often meant that the extensive tacit knowledge of the workers and successful economic practices of municipal enterprises were marginalised, ignored, or lost altogether. Knights, Lords, and generals were well represented on these boards (Jenkins, 1959, 16), but—to take but one example—not a single member of the fourteen appointees to the board of the first Gas Council had been connected with any of the numerous previous municipally owned public gasworks (Kelf-Cohen, 1973, 59).

Only with the sunset of the top-down Keynesian economic management of the postwar Golden Age did municipal socialism begin to re-emerge as a political force. In the dark days of Thatcherism, radical local experiments re-appeared in the shape of the Greater London Council (GLC) and other metropolitan councils. As Stuart Hall wrote, the GLC “operated right across the spectrum, politicising sites of daily life and drawing them into the orbit of politics in ways unthinkable to most conventional Labour councils” (Hall, 1988, 237). Thatcher, perhaps more than anyone, immediately saw the political danger inherent in any significant revival of municipal socialism—especially one with a strong participatory, democratic character. “The GLC represents modern socialism”, the arch-Thatcherite Norman Tebbit stated, concluding that ‘we must kill it’ (Wainwright, 2003, 8).

Many of Thatcher’s own colleagues were made somewhat uneasy by “her deep-seated and almost obsessive objections to urban socialists” (Kösecik and Kapucu, 2003, 87), whilst the municipal socialist and Labour MP for Manchester Central, Bob Litherland, wondered aloud in Parliament as to whether it might be deemed “unfair that the metropolitan counties have to suffer because a Prime Minister takes a paranoic view of Ken Livingstone and thinks that he is immortal” (HC Deb 11 April 1984). George Tremlett, a Conservative councillor on the GLC and outspoken critic of Thatcher’s abolition agenda, was dropped from the Conservative Group altogether after arguing that “the proposals were so outrageous and so contrary to all the Conservative traditions of government that they must call into question Mrs. Thatcher’s capacity to form a balanced judgement on important issues of public policy”, and eventually encouraging Conservatives to vote Labour in the 1984 by-elections (Kösecik and Kapucu, 2003, 77).

Despite this opposition, Thatcher persisted in her determination to abolish the GLC, which was accomplished with the Local Government Act of 1985, wherby these resurgent experiments in municipal socialism were legislated out of existence. With Thatcher’s defenestration of local government, municipal socialism once again faded from the picture politically in Britain. Recent plans to devolve power to local government have been a mixture of unintelligibility and—especially since 2010—cynical exercises in political buck-passing, particularly attempts to shift the blame for implementing austerity. As a consequence, the public has quite rightly reacted negatively to such efforts, as well as other associated attempts to address the overwhelming centralisation of Britain’s political economy and governance. Referenda on regional assemblies in England advanced by Tony Blair were soundly rejected—by as much as 78 per cent in the vote on devolution to North East England in 2004—while George Osborne’s lopsided localism agenda has been plunged into legislative formaldehyde with the arrival of Theresa May in Downing Street.

Municipal socialism revisited

In the modern era of 24-7 news cycles and horserace political coverage, local politics rarely receives much attention. When local campaigns and politics are covered at all, it is usually because such elections are deemed to be a bellwether for the relative national political strength of the parties. This downgrading of local politics also extends to political analysts and activists, and often even to the political parties themselves, as can be seen in their reluctance to invest precious resources in local campaigns.

There are promising signs, however, that this is now beginning to change. With the leadership of Jeremy Corbyn and John McDonnell, municipal socialism has once again returned to the Labour Party’s agenda in a powerful way. “With amazing creativity in the toughest of times, we are seeing the first shoots of the renaissance of local government for the many, not the few—the rebirth of municipal socialism”, Corbyn proclaimed in February of this year.

As indicated above, one of the leading models of re-emerging, modern-day municipal socialism in the UK is to be found in Preston. In 2011, the city—which had been declining economically since the 1970s—was reeling from a bitter double blow. Central government funding was plummeting under the austerity regime of Cameron’s coalition government and long held revitalization plans based on a £700 million shopping centre had collapsed. The newly-elected Labour council realized that they needed to come up with a new strategy. It was then that Councillor Matthew Brown, Cabinet Member for Social Justice, Inclusion, and Policy, stepped forward with his ideas. Inspired by alternative forms of economic development around the world, including the Mondragón cooperatives in the Basque region of Spain and the Evergreen Co-operatives in Cleveland, Ohio, Brown and his fellow councillors began to develop plans to deploy Preston’s existing assets and financial clout to catalyse a new local economic model that builds wealth rather than extracts it from the community. Working with the Manchester-based CLES, Preston Council approached the large anchor institutions in the area and came up with a strategy to shift as much of their spending and procurement back into the local economy as possible. In 2013, six of the local institutions that signed up for the effort spent around £38m in Preston and £292m in Lancashire as a whole. By 2017 this had skyrocketed to £111m and £486m respectively. The new localized contracts cover everything from school lunches to large-scale construction projects. Moreover, contracts shifted locally have a multiplier effect, as pounds circulate and recirculate throughout the local economy, creating jobs which in turn lead to more spending on goods and services, which then leads to the creation of more jobs, and so on.

The Preston Model, however, is about much more than just developing the local economy through shifts in spending and procurement. It is about alternative forms of ownership that not only enrich the lives and livelihoods of residents and workers, but also give them the opportunity to actively participate in the economic decisions that affect their lives and the future of their city. Even before working with the anchor institutions, Preston Council backed plans to develop co-operatives (and link them to the procurement needs of the anchors) and a public financial institution (see Chakrabortty, 2018; Sheffield, 2017; Singer, 2016).

Preston has been lauded by the Labour leadership and by sections of the media as an example of what could be achieved—albeit on a far greater scale—nationally under a Corbyn-led government. “This kind of radicalism”, argued John McDonnell in a 2016 speech at the Preston-based, worker-owned transport company TAS, “is exactly what we need across the whole country”.

Star Guardian columnist Aditya Chakrabortty kicked off his excellent new series exploring real-world economic alternatives with an in-depth study of the Preston Model, following on the heels of a broadly sympathetic write-up in The Economist, which dubbed Preston ‘Corbyn’s model town’. In a speech to the Co-operative Party, Corbyn himself praised the “inspiring innovation” of developments in Preston, particularly when set against the wider backdrop of swinging cuts to local government funding.

Preston also demonstrates the renewed potential of modern municipal socialism as a political strategy. As was the case a century ago, advancing a radical and innovative program of local economic regeneration can quickly lead to tangible political benefits. In the May 2018 local council elections, the Preston Labour Party pledged (among other things) to increase investment and jobs based on the Preston Model; to create a public bank and local wealth fund; to support the creation of new worker cooperatives; and to ask the Lancashire Pension Fund to invest more in the local economy (Preston Labour, 2018). The voters responded, as Labour increased its majority on the local council by picking up two seats—College Ward and Garrison Ward—that had long been controlled by the Tories. Moreover, as new councillor for College Ward Freddie Bailey explained to local journalists, “what we found helped was the Preston Model” (Farnworth, 2018). This was reinforced in the wake of the election when Matthew Brown was elevated to become Leader of Preston City Council.

Onwards to municipal socialism!

While it is right to remain cognisant of the limitations placed on local government by colossal cuts and decades of restrictive legislation, the twin temptations of fatalism—that nothing can be done—and deferral—that nothing can be done until Labour is in power in Westminster—must be roundly rejected. As Preston today demonstrates, a new radical municipalism can indeed emerge in Britain (as it is doing all across the world in the face of neoliberal crisis and austerity) and can serve as the basis for potentially much further reaching national and international change. Exorcising the zombie councils who do little besides implement austerity is vital, but so is creatively, confidently, and collaboratively exercising the significant powers councils do still possess.

As Daniel Frost recently urged in New Socialist, and as we have argued previously, there is much that can be done already—as a movement we need not wait for Labour to gain power nationally before we begin advancing ambitious programmes around a ‘new economics’ based on radical modern reinventions of municipal socialism.

Working with and for the local community to invigorate popular participation in economic decision-making and create—rather than merely extract—community wealth represents both an electorally and an economically successful strategy that can be implemented by councils across the country. The manner in which Preston has caught the imagination as a laboratory of ‘Corbynomics’ points to the wider role such approaches can play, not just in delivering for their local communities (vitally important though that is, the foundation of all else that follows) but also in helping us all to imagine, experience, and get involved with systemic economic transformation.

In an earlier period of economic contraction and difficulty in Lancashire, none other than Karl Marx wrote, in the New York Herald Tribune, of the emerging workers’ movement in the region: “The eyes of the working classes are now fully opened, they begin to cry: Our St. Petersburg is at Preston!”

Today, anyone looking around, from Capita to Carillion to the grim shadow of Grenfell Tower and the travails of East Coast Mainline, can see the existing neoliberal economic model failing and collapsing. But what holds a system in place, often, is a failure of imagination that things can fundamentally change, and that there are real, viable alternatives for organising a next system. Part of the answer to our failing economic system lies in on-the-ground experimentation and model building that embraces the design and principles of a new systemic alternative.

There is precedent for this. In the political science literature in the United States, it is known as the ‘laboratories of democracy’. In Britain, when Nye Bevan launched the NHS in 1948, he drew as inspiration from the Tredegar Medical Aid Society, a community-based model in South Wales that began in 1890. This small Welsh experiment was then scaled up into one of the world’s truly great public health systems.

We now have an opportunity—in the unknown amount of time between now and the next UK General Election—to get people familiar with the elements of the democratic economy through a widespread embrace of community wealth building approaches by Labour councils and local authorities. This suggests the potential basis for a new institutional underpinning for socialist politics, building support for our new economics from the ground up in a way that is far less scary and more comprehensible in a local context than it can sometimes appear at the national level. Our ambition, as the Corbyn Project, should be to bring about what Tony Benn termed “a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families”. Community wealth building is what that looks like when you start at the local level and begin creating systemic economic change from the ground up.

***

References

Chakrabortty, A. (2018) ‘In 2011 Preston hit rock bottom. Then it took back control’, The Guardian, 31.01.2018, https://www.theguardian.com/commentisfree/2018/jan/31/preston-hit-rock-bottom-took-back-control

Chandler, J. A. (2007) Explaining local government: Local government in Britain since 1800.Manchester: Manchester University Press.

Farnworth, A. (2018) ‘Labour turns two parts of Fulwood red with local election wins’, Blog Preston, 04.05.2018, http://www.blogpreston.co.uk/2018/05/labour-turns-two-parts-of-fulwood-red-with-local-election-wins/

Hall, Stuart. (1988) The Hard Road to Renewal: Thatcherism and the Crisis of the Left.London: Verso.

HC Deb (11 April 1984) Vol. 58, https://api.parliament.uk/historic-hansard/commons/1984/apr/11/local-government-interim-provisions-bill#S6CV0058P0_19840411_HOC_413

Jenkins, C. (1959) Power at the top: A Critical Survey of the Nationalized Industries. London: MacGibbon and Kee.

Judd, R. (1989) Socialist Cities: Municipal Politics and the Grass Roots of American Socialism. Albany: State University of New York Press.

Kelf-Cohen, R. (1973) British Nationalisation 1945-1973. London: The Macmillan Press.

Kösecik, M., and Kapucu, N. (2003) ‘Conservative Reform of Metropolitan Counties: Abolition of the GLC and MCCs in Retrospect’, Contemporary British History, Vol. 17, No. 3, pp. 71-94.

Lawson Dodd, F. (1905) Municipal Milk and Public Health. London: The Fabian Society.

Preston Labour. (2018) ‘Preston Labour Manifesto 2018 City Council Elections’, https://docs.wixstatic.com/ugd/b14b61_3f842b96c215443cac627887a71a18d7.pdf

 Rothstein, T. (1919) ‘A Revolutionary Municipal Policy’, The Call, 27.11.1919, https://www.marxists.org/archive/rothstein/1919/11/27.htm

Sheffield, H. (2017) ‘The Preston model: UK takes lessons in recovery from rust-belt Cleveland’, The Guardian, 11.04.2017, https://www.theguardian.com/cities/2017/apr/11/preston-cleveland-model-lessons-recovery-rust-belt

Singer, C. (2016) ‘The Preston Model’, The Next System Project, 09.09.2016, https://thenextsystem.org/the-preston-model

Stave, B. (ed.) (1975) Socialism and the Cities. Port Washington, N.Y.: Kennikat.

 Thompson, C. (1908) The Constructive Program of Socialism. Milwaukee: Social-Democratic Publishing Co.

 Wainwright, H. (2003) Reclaim the State: Experiments in Popular Democracy. London: Verso.

 Webb, S. (1889) Socialism in England. Baltimore: American Economic Association.

Webb, S. (1913) What about the rates?: or, Municipal finance and municipal autonomy. London: The Fabian Society.

Photo by drinksmachine

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The Laura Flanders Show, YouTube

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This isn’t about one or two good projects, or a small corner of a procurement budget getting earmarked for local vendors while everything else remains business as usual. It’s about taking the first steps towards truly transforming our economy so that it works for the many, not the few.

Great graphical resources from The Next System Project (featuring the Preston Model) and Democracy Collaborative (with Community Wealth Building).

The Next System: The “Preston Model” is helping inspire a new conversation about the role of local government in catalyzing locally-driven economic revitalization and transforming patterns of ownership towards democratic alternatives.  (We first featured a story about the Preston Model here in 2016.)

Today, the work in Preston to redefine how—and for whom—local economic development works is at the forefront of the agenda for local Labour councillors in the UK —and front and center at the  “Alternative Models of Ownership” conference in London on 2/10, featuring, among many others, The Democracy Collaborative’s Ted Howard. Major coverage for the model has recently appeared in The Guardian in the inaugural story in Aditya Chakrabortty’s new series “The Alternatives” (and an associated podcast which explores the role that The Democracy Collaborative and the Evergreen Cooperatives played in inspiring Matthew Brown, the leading advocate behind the Preston Model.)

Because the Preston Model isn’t a simple one-element strategy, but a holistic framework for integrating community, cooperative, and public assets into a mutually supporting system of local economic prosperity, we thought it would be helpful to provide a visual representation of how the pieces of the model fit together to build community wealth:

Click to enlarge

Community Wealth Building: Eight Basic Principles

Based on Ted Howard’s remarks to the recent Alternative Models of Ownership conference, we’ve distilled the eight basic principles behind community wealth building—a transformative approach to local economic development—into this handy one page guide.

Click to enlage

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10 Cities Investing in Healthy, Sustainable & Equitable Growth

City governments are shaping up as key actors accelerating worker co-op development. It started in 2009 when the City of Cleveland accessed a federal guaranteed loan to help finance the Evergreen Cooperatives. Since then, nine more city governments have moved to promote worker cooperatives through municipal projects, initiatives, or policies because they want to reach people and communities often left out of mainstream economic development. Other city governments including Philadelphia are considering it now.

Getting worker cooperatives to the scale of being a real market alternative will take time, energy, and the sort of experimentation we are seeing from these ten cities. A recent Imagined Economy Project report, Cities Developing Worker Co-ops: Efforts in Ten Cities, explores how city governments are thinking about their strengths in making worker co-ops structural features of local markets.

Traditional economic development, said Madison, Wisconsin’s Ruth Rohlich in the report, “isn’t helpful in creating really healthy communities, financially strong communities, in an equitable way.” Worker ownership may be a way forward, and city experiences right now will help municipalities decide how worker co-ops may become long-term features of their economic development agendas. To commit to worker cooperative development long term, the cities will need to see modest growth in jobs and business ventures resulting from their current efforts and may benefit from input and insights from worker cooperatives as they continue to adjust their sense of best practices.

Cleveland and New York Leading the Way through Distinct Approaches to Worker Co-op Development

The City of Cleveland ventured into worker co-op development in response to a Cleveland Foundation initiative to set up a network of worker cooperatives connected under a corporate umbrella that planned to supply needed goods or services to hospitals, universities, or other anchor institutions. “I heard about it just in passing,” said Cleveland’s Economic Development Director Tracey Nichols quoted in the report, and the word of mouth led to the first instance of a city getting involved in worker cooperatives in a big way.

The main way the City of Cleveland assisted the initiative was by accessing millions of dollars in federal guaranteed loans and some federal grant funds as startup capital for the Evergreen Cooperatives. In so doing, the city produced the contours of one municipal approach to worker co-op development, termed the anchor approach in the report, whereby the city government role is mainly to finance startups and resolve underwriting risks in what are considered unconventional projects. In Cleveland, Nichols used tax increment financing and set aside the non-school portion of payments in lieu of taxes as a debt reserve for loan repayment to minimize risks to the city.

New York City is the nation’s second large scale municipal effort to bolster worker cooperative development locally. Instead of helping build worker cooperatives as part of anchor institution supply chains, New York is one of five cities taking an ecosystem development approach in the vein of the Democracy at Work Institute (DAWI). A worker cooperative ecosystem, according to a Democracy At Work Institute and Project Equity report, is a series of interacting elements including but not limited to cultural/entrepreneurial familiarity with worker co-ops, supportive laws, customers, capital, technical assistance, and professional service providers that help worker cooperatives emerge and survive.  As part of its Worker Cooperative Business Development Initiative, New York committed to funding a collaborative of cooperatives — there were eleven funded in 2015 and fourteen in 2016 — to spread general awareness of the worker cooperative business form, incubate new or converted worker co-ops, and support existing worker co-ops with matters like drafting by-laws, accounting, Board development, and employee participation strategies. The City itself also became part of the ecosystem when it began offering a “10 Steps to Starting a Worker Cooperative” course through its Small Business Services Solution Centers.

The separate approaches have produced modest results, with the three Evergreen Cooperatives for-profit startups employing 113 people (38% member-owners) over several years and New York’s initiative leading to 21 new worker cooperatives involving 141 worker- owners in its first year. While the wage and earnings statistics specific to the co-ops developed through these municipal efforts are unavailable, a Sustainable Economy Research Project report found that worker co-ops in New York pay an average of $25.00/hour but apparently offer less than full time opportunities; the average annual income earned in New York’s worker cooperatives is $18,000.00 according to that report, mostly involving women of color. Current wages and earnings in the Evergreen Cooperatives are also unknown, but 98% of those employed by the three ventures are Clevelanders, 100% are racial or ethnic minorities, and 47% are returning citizens, Evergreen Cooperatives’ CEO John McMicken offered in an email.

Both municipal approaches have been inspirational to other cities. Rochester, New York and Richmond, Virginia are at various stages of planning for municipally-supported anchor-linked worker cooperative projects as part of broader poverty-reduction efforts, while Richmond, California, Madison, Wisconsin, Minneapolis, Minnesota, and Austin, Texas are working to bolster and expand worker co-op ecosystems in their cities.

Spread to New Cities Leads to Evolution in the Approaches

The ten city governments are attracted to worker cooperatives as sources of quality jobs, as well as ways to build wealth for individuals and divested communities. Accomplishing those goals will be a matter of “adaptive management,” assessed Berkeley’s Brandi Campbell, as they know they have much to learn. Ultimately, cities want sustained growth of individual co-op businesses as well as multiplier effects in the local economy to result from their investments in worker co-op development. These may be tall orders for geographically-dispersed cities with very different experiences with worker cooperative or broader social enterprise cultures, and the city governments are aware that they will need to readjust their approaches and planning as they learn how to develop worker co-ops by doing it.

Part of learning by doing involves learning from each other. The city governments are motivated to apply lessons from other city experiences as well as from the broader cooperative or co-op developer community. Most of the ten cities active in worker cooperatives are connected with expert consultancies that are playing key roles in helping inform municipal efforts and also bringing insights from other local projects or initiatives with them as they help additional city governments develop their desired approaches to worker co-op development. Certainly, ideas about how municipalities can be most effective in worker co-op development are cross-pollinating, and this has resulted in some evolution of what can be called the Cleveland and New York models of worker co-op development as additional city governments work through the place-based opportunities and challenges related to emulation in their own local areas.

Evolution in the Anchor Approach — from Cleveland to Rochester

The city role in the anchor-linked approach to worker co-op development started in Cleveland as primarily financial, but the newer cities are taking on expanded roles. In both Richmond, Virginia and Rochester, city governments have initiated anchor-linked worker co-op projects from City Hall, so their roles have evolved to include finance but also conceptualization, planning, and active participation in setting performance targets.

Rochester is further along than Richmond in its planning, already having completed a feasibility study in consultation with the Democracy Collaborative or the main architect of Cleveland’s Evergreen Cooperatives. Working with the Democracy Collaborative, Rochester has been able to build upon the lessons from the Cleveland experience. Certain alterations have been built into Rochester’s anchor approach that, ultimately, may help minimize financial risk and potentially allow for quicker growth of the supportive infrastructure built through the corporate umbrella.

First, the City of Rochester is acting to influence the business mix. Said Henry Fitts, Director of Innovation for the City of Rochester, “A lesson learned from the Evergreen experience has been that high-capital startup businesses are a lot more difficult to accomplish through this model.” Rochester is interested in focusing more of its business starts on lower-capital, service-based businesses. For instance, only one of Rochester’s five potential worker cooperatives is a multi-million dollar venture, compared to all three of the Evergreen Cooperatives startups, according to a 2016 planning document released by the Democracy Collaborative. Additionally, the worker co-ops proposed in Rochester are planned to satisfy unmet consumer or anchor institution demands, instead of entering markets already served by existing vendors. Fitts believes this will minimize risk, as well as prevent duplication and competition within the local supply chain.

Second, the anchor approach in Rochester is conceived to build alliances with independently-forming worker cooperatives or conversions as a way of accelerating growth in the cooperative sector. Rochester’s planned nonprofit umbrella corporation — the equivalent of the Evergreen Cooperatives Corporation — plans to offer business services and back office support to other cooperatives. Potentially, this will facilitate profit pooling across a wider universe of co-ops that can be used to finance additional worker co-op starts. Speedy growth in the number and size of anchor-linked worker cooperatives is the best way to benefit worker co-op members, while also lighting a spark in the divested communities where they locate. The concept in Rochester builds a new avenue for growth into the approach.

The Ecosystem Approach in Motion in Madison and Richmond, California

New York’s effort to promote worker cooperative development happened by a collaborative of nonprofit co-op developers that provide technical assistance. As more cities have emulated New York, the ecosystem approach has shaped up, as cities think about the DAWI-inspired ecosystem concept in the context of the particular resources, strengths, and challenges in their cities. In New York, the collaborative of co-op developers organized itself, but this has not been the experience in every city. How to activate a community of worker co-ops or co-op developers is a challenge to overcome in certain places, and trajectories in two cities lead to different answers.

Richmond, California had a difficult experience getting worker cooperatives established through an education-focused program it funded for one year in 2011/12, finding that cooperative entrepreneurs needed more business and social supports than were available. Learning from those challenges, City Councilperson Gayle McLaughlin is helping the nonprofit Richmond Worker Cooperative Revolving Loan Fund, spun off from her time as Mayor, establish a worker cooperative incubator. The planning is funded by the California Endowment and, if established, will provide heavier business supports than the initial City of Richmond endeavor. Incubators have not figured prominently in municipal understandings of how to promote worker cooperatives, but it may be useful in areas like Richmond without much local worker cooperative experience arising organically.

The path forward in Madison is different. Madison enjoys a comparatively rich cooperative history and business culture, but worker co-op development organizations did not join together to lobby for municipal funding as they did in New York. Instead, the Mayor initiated the plan to fund cooperative development through personal interest and more casual interactions with some of the city’s cooperatives. In the absence of a co-op developer collaborative like New York’s, the City of Madison is setting out to organize one itself. After approving budget allocations of $600,000 for each of the next five years, Madison has been encouraging a variety of existing local cooperatives, organizations, and lending institutions to come together to discuss how they can proceed in setting up worker co-op development capacity as well as loan funds.

The city is convening the local organizations, cooperatives, and lenders to decide together how best to divide responsibilities and, said Madison’s Ruth Rohlich in an interview, the group “may have to create new organizations to manage the program as opposed to just adding it to already existing programming.” While the participants have leeway in imagining how they can best make use of Madison’s investment in worker cooperatives, the city government has used its Request for Proposal to place some parameters on the planning process. For instance, Madison expects any organizations contracted for this initiative to work with University of Wisconsin’s Center for Cooperatives (a university-based research center), Shared Capital Cooperative (a cooperative lender), and to include labor unions in planning and implementation processes. Like New York, it will also require reporting so that the city can help troubleshoot if necessary.

Another element introduced in Madison is to make finance capacity an explicit focus for ecosystem building. Madison is devoting half of the funding allocated, or $300,000 per year for five years, for the development of a worker cooperative loan fund. The City of Madison expects whatever fund managers it contracts to be capable of growing the loan fund beyond the city’s contribution, mainly through fundraising plans, matching dollar requirements, or getting financial institutions to set aside percentages of loan capital.

Berkeley and Oakland Join the Wave with a Third Approach to Worker Co-op Development

A third approach aimed at incentivizing worker cooperatives through preference bidding is taking shape in Oakland and Berkeley in consultation with the Sustainable Economies Law Center. Both cities passed resolutions to establish bidding preferences earlier in 2016 for implementation in the coming months or year. Oakland just sent a follow-up ordinance for City Council consideration in October 2016.

While the details are still being worked out for eventual implementation, the resolutions or planned ordinances in Berkeley and Oakland involve worker co-op certification protocols intended to make sure preferences go to truly worker-owned and managed businesses; informational materials to be displayed by the city to incentivize worker co-op starts; and discounts or points for worker cooperatives competing for city bids. Additionally, Berkeley’s ordinance includes some tax and registration exemptions or reductions, as well as expedited land use review.

As preference bidding proceeds, city governments are likely to adjust their approaches. Said Oakland Councilperson Annie Campbell Washington in an interview, “There will be a limited number of worker cooperatives right now who will be able to take advantage of (bidding preferences).” Getting worker co-ops to form in the areas of city purchasing and contracting may prove to be the main puzzle to be solved in growing the worker co-op sector through bid preferences and, ultimately, a focus for experimentation as the approach unfolds over time.

Making Worker Cooperatives a Permanent Urban Economic Development Focus?

In her book The Entrepreneurial State: Debunking Public Vs. Private Sector Myths, Mariana Mazzucato made the case that government spending is often implicated in cases of transformative innovation, such as that motivating the advocates of worker cooperatives as engines of market change. The spreading municipal commitment to worker cooperatives is notable, not only for the resources city governments bring but also for the connections they can make between worker cooperatives and business, financial, and nonprofit communities as well as other scales of government. Institutionalization or making the city commitment long term or permanent could help produce the sort of sustained attention, effort, and patience needed to scale-up worker co-op sectors.

At this time, the ten city governments have not taken steps to make support of worker cooperatives routine. Rochester’s Fitts expressed in the report a sentiment common among the cities. In Rochester, ongoing municipal commitment will depend on showing, he said, “that this is a feasible and effective method of capturing some of the economic energy, that it can be replicated, and that it can continue to grow businesses of this kind.” New York City has decided to fund year by year, although it could decide to make multi-year commitments in the future.

Worker cooperatives may have additional ideas for measuring and enhancing performance of these municipal cooperative development efforts, as well as deciding collaboratively how city governments can improve their support. But, assuming worker cooperatives perform as desired, city governments cited additional challenges to asses before deciding whether or how worker cooperatives will fit into their economic development plans. First is duplication or displacement of existing small businesses. Oakland’s Campbell Washington relayed a sense that city officials like herself are to “advocate for local independent businesses at the same time I am advocating for worker cooperatives.” Displacement of existing local businesses and the jobs they support are risks in all types of economic development, but innovative cities want to see net growth of opportunity, especially for people at the bottom of the wage hierarchy. Advocates of worker cooperatives can allay some of this challenge by focusing on growing or emerging market sectors when possible, or in areas of unmet demand.

A second challenge to routinizing city commitments to worker development concerns resources. City governments cannot always count on slack budgets and reported needing to make hard choices at times between competing projects. Cities have been important allies to worker cooperatives, but the federal government role could be bolstered, helping cities access an adequate resource base from which to co-create innovations with community.

Finally, some cities are curious to see how well worker cooperatives balance social and business purposes. There is possible tension between getting to social inclusion and remaining competitive in the market, noted Minneapolis’ Daniel Bonilla. Cities want to see outcomes in both areas and, if both can be accommodated, worker cooperatives may become more permanent features of city economic or small business development planning.

[Editor’s note: attempts were made by the author to elicit feedback on the various policies discussed in this article from co-op worker-owners, but none have so far responded.  However, as our mission at GEO is to amplify the voices of worker-owners specifically, we are asking again for feedback from practicioners on these municipal policies. It would be especially helpful to hear from worker-owners in the cities discused about their experience of the programs so far.  We encourage everyone, but especially worker-owners, to respond in the comments section.]

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We first learned about the innovative, multistakeholder Fifth Season Cooperative in Wisconson’s 7 Rivers region from the community wealth builders at Gundersen Lutheran Health Systems, whom we interviewed for one of the case studies in our report Hospitals Building Healthier Communities: Embracing the Anchor Mission.  The more we learned, the more excited we became…the cooperative has a uniquely innovative six-member class structure, and is transforming the shuttered NCR factory in Viroqua, WI into an engine of regional food security and local economic stability.  Here’s our infographic outlining how the cooperative works:

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