Mother Jones  [Printer-friendly version]
January 31, 2006


Beyond the remains of yesterday's politics, the change you're looking
for has already begun.

[Rachel's introduction: "There are reasons to believe we are entering
what can only be called a systemic crisis. And the emerging
possibilities are not easily described by the conventional wisdom of
either left or right. The institutional power arrangements that have
set the terms of reference for the American political-economic system
over roughly the last half century are dissolving before our eyes --
especially those that once constrained corporate economic and
political power."]

By Gar Alperovitz

Where is America headed? It's not hard to find pessimists. Author and
former Nixon adviser Kevin Phillips believes the nation is dominated
by a new "plutocracy" in which wealth reaches "beyond its own realm"
to control government at all levels. The writer Robert Kaplan predicts
that our society could soon "resemble the oligarchies of ancient
Athens and Sparta." Sociologist Bertram Gross has predicted a
"friendly fascism." Imagine what another 9/11 would do.

It's also not hard to find optimists. Bush is in trouble, the GOP is
struggling to recruit candidates in many races, and liberals are
beginning to smell blood. After all, if 70,000 votes had gone the
other way in Ohio -- and if voters hadn't been forced to wait in line
for endless hours-we might have a Democrat in the White House right
now. The Dean campaign, America Coming Together, MoveOn, Wellstone
Action, and many other efforts show new energies beneath the surface.
The Iraq war is becoming increasingly unpopular. The pendulum will
surely swing.

My own view is that both these judgments are almost certainly wrong.
Both assume that the crisis we face is a political one, pure and
simple. But what if it is something different? There are reasons to
believe we are entering what can only be called a systemic crisis. And
the emerging possibilities are not easily described by the
conventional wisdom of either left or right.

The institutional power arrangements that have set the terms of
reference for the American political-economic system over roughly the
last half century are dissolving before our eyes -- especially those
that once constrained corporate economic and political power.

First, organized labor's capacity to check the giant corporation, both
on the shop floor and in national politics, has all but disappeared as
union membership has collapsed from 35 percent of the labor force in
the mid-1950s to a mere 7.9 percent in the private sector today.
Throughout the world, at the heart of virtually every major
progressive political movement has been a powerful labor movement.
Liberalism in general, and the welfare state in particular, would have
been impossible without union money and organizing. The decline of
labor is one of the central reasons traditional liberal strategies are
in decline.

Second, globalization has further enhanced corporate power, as the
threat to move jobs elsewhere erodes unions' bargaining capacity,
while at the same time working to reduce taxation and regulation. (The
corporate share of the federal tax burden has declined in eerie
lockstep with union membership -- from 35 percent in 1945 to 10.1
percent in 2004.) This in turn has intensified the nationwide fiscal
crisis, further undercutting efforts to use public resources to solve
public problems ranging from poverty and hunger to energy conservation
and even simple repair jobs such as fixing decaying roads, bridges,
and water systems throughout the nation.

Third -- and most important -- the Republican "Southern Strategy" has
now completed the transformation of a once (nominally) Democratic
South that at least voted for Democratic presidents into a reactionary
bastion of corporate power based on implicit racism and explicitly
religious divide-and-conquer fervor. Bill Clinton's brief moment
occurred just before the full consolidation of this Southern
stranglehold. Very few observers have grasped the full implications of
this shift: The United States is the only advanced political economy
where the working class is fundamentally -- not marginally -- divided
by race. It is also the only one where a massive geographic quadrant
is now essentially beyond the reach of traditional progressive
politics. George Bush, though extreme, is no accident; nor can the
core political relationships that now define the South be easily
unraveled. Hence, yes, a Democrat might be elected president one day.
But no, such a shift is not going to nurture an era of renewed liberal
or progressive reform. The system of power that once allowed this no
longer exists. Period.

Some who have sensed the far-reaching character of these system-wide
changes have despaired of any hope for the future. Perhaps the end of
one set of structural relationships -- he ones we have come to take
for granted in our own lifetimes -- spells the end of all potentially
positive systemic possibilities.


But I am a political economist and a historian, one for whom the best
way to understand current events is to think of them as an ongoing
movie, not a snapshot. What is interesting is not simply the current
reel, but the previous one, and above all what both suggest about the
next one. Even though I think times are likely to get worse before
they get better, let me explain why I am a prudent optimist about the
long haul -- even allowing for the profound changes taking place (and
in some ways because of them).

There have been other times when change seemed impossible. During the
McCarthy era of the mid-1950s, for instance, they shot anything that
moved politically, especially in my (and Joseph McCarthy's) home state
of Wisconsin. Fear erased any suggestion of progressive ideas, and
anyone who dared to even say as much was obviously a fool. What came
next, of course, were the multiple -- and totally unpredicted --
political explosions of the 1960s. Clearly, those who viewed the 1950s
simply as a depressing snapshot were missing something very important.

Similarly, we tend to recall Martin Luther King Jr. and the great
civil rights moment of the 1960s as if they'd arisen easily, almost
naturally. We forget that for many decades prior, there was very
little to suggest the possibility of momentous change. Those who
thought otherwise, who did attempt to organize in the South, risked
their lives. The challenge of George Bush pales in comparison with the
challenge of Mississippi in the 1940s and 1950s.

The idea that environmental concern might one day become important
also seemed far-fetched only a few decades ago. When I directed
legislative work for Senator Gaylord Nelson, the founder of Earth Day,
everyone knew environmentalism was a political non-starter until,
seemingly out of nowhere, a powerful movement forced Richard Nixon to
create the EPA and sign the Clean Air and Clean Water Acts.

We also tend to forget that the feminist movement produced what became
the most important cultural revolution in modern history after decades
of seeming quietude once the franchise was achieved in 1920.

Even more broadly: The Soviet Union collapsed, apartheid retreated
abruptly, the French Revolution overthrew the monarchy, a handful of
minor American colonies defeated the great British Empire -- all
against huge odds, and all unexpected by the experts.

Such reminders of historical possibility do not guarantee that a
future progressive revival is building up beneath today's surface
calm. They simply suggest that the pessimists may -- or may not -- be
right, and that those with their noses glued to the window glass of
the immediate present commonly miss the changing weather patterns in
the distance.

It is the nature of a systemic crisis to create pain -- from loss of
jobs and lack of health care to trouble paying for college or even
secure housing -- especially (as Katrina revealed) at the state and
local levels. Which also means that this -- not national politics,
where progressives so often feel impotent -- is the place to look for
longer-term hope of change.

In almost every era of American history, the ideas, experiments,
programs, and organizing that ultimately fueled major societywide
reform were developed first at the state and local levels -- and they
were usually developed, we might add, out of pain. Moreover, in almost
every instance, ordinary people -- not saints, not national leaders --
were central to the process. Poor farmers in Mississippi slept with
shotguns next to their beds during the civil rights era. Nineteenth-
century women organized to demand the right to vote at a time when the
mere idea seemed laughable -- and slowly, agonizingly succeeded in
state after state until they built up enough momentum to enact
constitutional changes. The workers and farmers who laid the
groundwork for the populist and progressive eras faced organized
violence, Pinkerton goons, armed troops deployed against strikers, but
in the end they, too, achieved system-wide reforms. And during the
hysteria of the McCarthy era, ordinary people in Wisconsin --
teachers, college students, factory workers -- quietly laid the
foundation for an ultimately successful "Joe Must Go" effort. I
vividly remember one of my high school English teachers stuffing
pamphlets into mailboxes at night. He would have lost his job had he
been discovered -- not for participating in politics, which at least
in theory was his right, but for daring to defy a senator who brooked
no challenge.

It is a commonplace of serious historical research worldwide that the
unsung actions of people where they live and work are central to
large-order change. Regulatory commissions for railroads and other
industries, minimum-wage laws, food- and drug-safety laws, the estate
tax, the eight-hour workday, Social Security and related forms of
public insurance, child labor laws, laws to increase factory safety,
workers' compensation, the preservation of national parks and other
conservation measures, and many, many other national policies at the
heart of modern American reality built upon precedents first developed
and refined by local citizen effort.

IS THERE ANYTHING IMPORTANT and potentially system-changing going on
at the grassroots today? Yes -- but you have to look beyond
conventional media reporting, and even beyond the traditional New Deal
and progressive policy paradigms.

One of the most important trends involves an array of new economic
institutions that transform the ownership of wealth in ways that
benefit "small publics," groups of citizens whose efforts feed into
the well-being of the community as a whole. Here are a few little-
known facts:

** More people are now involved in some 11,500 companies wholly or
substantially owned by employees than are members of unions in the
private sector.

** There are more than 4,000 nonprofit community development
corporations that build housing and create jobs in cities across the

** Both Democratic and Republican city officials have begun to
establish municipally owned public companies to make money for their
communities (and often to solve environmental problems).

** Numerous quasi-public land trusts that stabilize housing prices now

** Cities and states regularly invest in job-creating efforts, often
using large-scale public pension assets. In Alaska, the state's
Permanent Fund invests oil revenues and provides each citizen with
dividends. In Alabama, the public employee retirement system finances
a broad range of job-stabilizing and moneymaking industries, including
many employee-owned businesses. Numerous other local and state
activist efforts to shift the way wealth accumulates and moves around
are under way, from "living wage" campaigns to Wal-Mart challenges and

Not surprisingly, in case after case, ordinary citizens have taken the
lead in developing these new strategies, because they often represent
the only way to solve real-world problems in the face of national-
level failure.

Put another way: The systemic crisis is systematically driving
unsolved problems to the local level -- and systematically, too,
forcing the development of (and opening the way for) new approaches.

The emerging strategies point toward a quietly developing
"commonwealth tier" of the economy.

At the same time, in quite another realm, there has also been what
might be called a "populist vector" of change -- a push to create more
economic equality, not by taxing the middle-class suburbs (as in much
traditional liberal policy), but rather the top 1 to 3 percent who,
amazingly, own more than half of all of America's investment capital.
(The top 1 percent alone has twice the income of the bottom 100
million Americans!)

These new strategies move the political divide, putting 97 to 99
percent of the population together on the side that has much to gain
from progressive politics.

In November 2004, for instance, California voters overwhelmingly
approved tax increases for people making more than $1 million, and
earmarked the proceeds for mental health programs. New Jersey has
enacted legislation taxing those making more than $500,000, and
designating the money to offset property taxes that fall
disproportionately on the middle class and the poor. In Connecticut, a
recent poll found 77 percent of voters, including 63 percent of
Republicans, in favor of a tax on those making more than $1 million. A
2006 initiative in California would tax the top 1 percent (individuals
making more than $400,000 and couples making more than $800,000) to
pay for quality preschool for all four-year-olds. As the fiscal crisis
deepens, many other states are beginning to look in this direction.

If the national policy process remains deadlocked and the pain
continues to build, it is not unreasonable to predict that both the
wealth-building and populist trends will accelerate -- and might
ultimately explode, New Deal-style, in a fireworks of national
policies based on the steady accumulation of local and state
experience and political networks.

What makes the wealth and tax trajectories particularly interesting is
that they involve institutional change. This takes us to the deeper
meaning of the systemic crisis. In fact, it is not simply that the
traditional balancing forces in the corporate system have collapsed.
Rather, the very nature of that system -- especially its rules for how
wealth is owned and managed -- appears to be coming into focus.

The truly defining characteristic of any political-economic system
centers always on the issue of property: In the feudal era, massive
land ownership was central to who had power. In 19th-century
capitalism, modest-size enterprise ownership (of farms as well as
businesses) was central. In modern capitalism, corporate and elite
ownership is key. In socialism, state ownership is the hallmark.

What is striking is that taken together, the various emerging
strategies offer the possible outlines of a different answer to the
central question of who should own wealth. That longer-range vision is
a very decentralized, community-benefiting economic system. Variations
on the Alaska and Alabama precedents (and many other state investment
programs) even suggest a larger-scale federal ownership option -- and,
ultimately, a populist commonwealth alternative to both socialism and
capitalism. If so, the current realities we assume to be inevitable
and immovable just might be neither. And, just possibly, the kind of
systemic change that is common throughout world history may not have
stopped dead in its tracks at the outset of the 21st century.

I am a historian, not a utopian. It is possible that things will never
change, or that times will get worse. It is, of course, also obvious
that the only way to find out if major change is possible is to roll
up one's sleeves and get to work. (Besides, there is little to lose;
good things get done no matter what.)

For skeptics in general and progressives in particular, it is useful
to recall one other case study of how very large-order change (not
simply electoral victory) can sometimes be achieved against huge odds:
In the 1940s and 1950s, conservative thinkers and activists were
regarded as antique and ridiculous by the mainstream press, by most
serious academics, and by the nation's political leadership. They were
far more marginal than today's liberals; the idea that you could
change the system in their direction seemed absurd. Long before
Goldwater in 1964 and Reagan in 1980, however, serious conservatives
got down to the work of putting together a movement that would come to
dominate every major institution of national governance. For the
moment, that is -- until we see the next reel of the movie.

Gar Alperovitz is a professor at the University of Maryland, and the
Author of America Beyond Capitalism: Reclaiming Our Wealth, Our
Liberty, and Our Democracy.