Unmaking Goliath: Community Control in the Face of Global Capital, by James DeFilippis. Routledge, 2004. 188 pp. $24.95 (paperback).
Contours of Descent, by Robert Pollin. Verso, 2003. 238 pp. $21.00 (hardcover).
Community-based movements for development and local autonomy face a number of challenges. One of the most daunting is the problem of capital mobility. In the new global economy, businesses are able to pick up and move with greater ease than ever. Many forms of capital flight can occur with just a few keystrokes, leaving communities without the necessary investment to create jobs, develop housing and supply local government with needed tax revenue. In many cases, just the mere threat of capital flight is enough to do damage – to force workers to take pay cuts or to pressure municipal governments into giving tax breaks or other incentives to investors.
James DeFilippis’s Unmaking Goliath assesses the effectiveness of various forms of community control in building local autonomy in the present era of globalization. DeFilippis is not interested in community control as an end in itself, but as a means of building an equitable and just society.
The book is centered around two fundamental themes. One has to do with community-based forms of ownership (do they increase local autonomy and are they economically viable?) and the other with how local alternatives can be linked to the grassroots globalization movement that is seeking to curb the power of global capital. In fact, DeFilippis builds the local-global connection into his definition of local autonomy: “…local autonomy is realized when actors within localities have recognized how they are connected to the extralocal world, and have transformed those connections so that they are better able to control them.”
Unmaking Goliath presents some instructive case studies on three types of collective ownership existing in the United States. One chapter deals with the collective ownership of work and one of its most common forms – employee stock ownership plans (ESOPs). In most ESOPs employees own a minority share in the company, and while generally successful economically, worker participation is not much greater than in traditional companies. On the other hand, worker cooperatives – such as the Cooperative Home Care Associates in the Bronx and Marland Mold, Inc., a manufacturing enterprise in Pittsfield, Massachusetts – “are perhaps the purest form of economic democracy currently operating in the United States,” with each member holding voting rights and profits being shared in an equitable manner.
Another chapter discusses collective forms of housing and home ownership by examining limited equity housing cooperatives, community land trusts and mutual housing associations – specifically the Mutual Housing Association of Southwestern Connecticut, the Lower East Side Limited Equity Co-ops and the Burlington Community Land Trust. The chapter on the collective ownership of money examines community development financial institutions (CDFIs) and local exchange trading systems, which are place-based currency systems that reduce the outflow of money from a community. DeFilippis focuses on the Bethex Federal Credit Union in the South Bronx and Ithaca Hours.
Unmaking Goliath shows that there are many fiscally viable options and that they do make life a little better, but they also have major shortcomings. One is that their overall impact is very limited. Generally, these alternatives emerge and are encouraged in areas where the market economy is failing. In such areas, they present no threat to capitalist relations. In fact, one could argue that such local participation bolsters the whole system by taking up the slack rather than forcing the system to change. Another downside is that many community development organizations have become very dependent on the good will and largesse of foundations and local government officials and, as a result, they have become a part of the system more than a challenge to it.
This is an important point because DeFilippis argues that, to be effective in cultivating democratic participation and local autonomy, organizing is essential. The organizing needs to continually be regenerated, and it needs to connect to the grassroots (anti-corporate) globalization movement. (See SF #111.) But the reverse is true as well. Many forms of capital are not nearly as mobile as made out to be, and the grassroots globalization movement needs to be more connected to local politics and conflict. Alternatives are largely built on the local level. DeFilippis echoes Antonio Gramsci when he writes, “only through participation in the construction of a new hegemonic framework can aspiring counter-hegemonic projects realize their goals.”
Activists must reject the neoliberal principles that government must be scaled back and that it does not have the resources to revitalize urban areas or to strengthen the social safety net. Acceptance of this principle leads to a “by the bootstraps” ethic that lets government off the hook. It leaves communities looking within themselves to find solutions and without a major set of tools that can be used for restricting capital flight and promoting democratic control over economic forces.
The problem of federal government cutting back aid to cities, slashing funds for Section 8 housing subsidies and otherwise washing its hands of its responsibilities to “promote the general welfare” is often blamed on a strained economy. But how much of that is real and how much is pretext used to justify falling wages, local disinvestment and government belt tightening?
Helping to illuminate the national and global economic picture is Robert Pollin’s Contours of Descent. The University of Massachusetts economist offers an exposition of the problems that have fractured the U.S. economy and helped created a “landscape of global austerity.” The book provides a context for understanding many of the forces shaping both the global and local landscapes. Yes, in many ways the economy faces major strains, but the corporate elite are increasing their income and wealth in leaps and bounds. Worker productivity has grown much faster than worker pay, and changes in federal tax policy have favored the rich at the expense of everyone else. Austerity is foisted on workers and communities with the aid of mainstream economists who mystify economic reality, leaving many people feeling confused and helpless. In contrast, Pollin is a people’s economist who presents complex economic issues in a comprehensible form and helps the reader to sift through the class biases of conventional economics.
Pollin claims that, in large part, the problems faced by the U.S. economy – especially the stagnating wage of workers and the rollback of the social service functions of the federal government – cannot be blamed solely on the current Bush Administration or the shock effects of 9/11. Instead, he argues that there has been a neoliberal consensus building for several decades and the Clinton Administration was a key player in its development. In fact, the problems are not so much economic, but political and social. The deregulation of the past two and a half decades and the crony capitalism of the George W. Bush era are destroying the social contract.
Capitalist competition creates winners and losers. The drive for profits stimulates the development of technology for greater productivity. Workers are displaced in the process and regional disinvestment takes place. The market, in other words, produces areas of abandonment and decay.
This is not a newly identified problem. For instance, writing in the context of the Great Depression, Karl Polanyi pointed out that the 1920s were dominated by a free-market ethos that produced a Hobbesian “war of all against all.” In the 1920s, economic liberalism sought to eliminate interventionist policies that interfered with the freedom of markets. Polanyi argued that, “for market economies to function with some modicum of fairness, they must be embedded in the social norms and institutions that effectively promote broadly accepted notions of the common good.”
What was needed in the 1930s, and is still needed today, are government policies that protect those who are cast aside by market forces. The social commitment to look out for the common good needs to be rebuilt and made stronger than ever, given the current global forces.
Pollin offers a program for an egalitarian alternative to which every community activist should subscribe. Contours of Descent shows that local movements have intellectual allies who can help debunk the economic mystification propagated by the right wing. Similar to DeFilippis’s suggestion of having a sophisticated understanding of the broader contexts of local action, this book provides an understanding for taking local action that challenges the broader system of unregulated markets and unconstrained privilege rather than reinforcing it.