Friday, December 30, 2011

Review of Gar Alperovitz's America Beyond Capitalism

December 28, 2011

A Review of America Beyond Capitalism by Gar Alperovitz[1]

By Dan Swinney

I just read Gar Alperovitz’s America Beyond Capitalism. Democracy Collaborative Press just released a second edition of the book, first published in 2005, with an updated introduction. It is a thoughtful and serious book with a complex argument that’s worth studying and engaging. Gar’s demand is that as we restructure our society into a Pluralist Commonwealth the ownership of the nation’s wealth must be broadly re-distributed—as James Speth summarizes in the Forward—to benefit the vast majority of American citizens.

Gar and I share a common history and common values. We both went to UW/Madison and were influenced by Bill Williams (and I’m sure there must have been others). Our formative experience was in the southern civil rights movement, the anti-war, and the democratic movements of the 1960s. We both became immersed in the steel industry as it became the sector where the then new American Low Road began to test its new approaches in the 1970s. And we both became deeply engaged in the theory and practice of the labor movement as it faced dramatically different challenges with massive plant closings, layoffs, and concession bargaining. Gar’s work in Youngstown was path breaking in opening up totally new forms of public and labor engagement in manufacturing. He has opened up new ground in the work with his colleagues in Cleveland in the Evergreen Project with their persistent confidence in theory and practice on the power of democracy.

I know from recent discussions Gar’s interest in integrating the various themes related to manufacturing into his work. I put forward the following views in the spirit of stimulating collegial debate and discussion. At a time of great change, strategic debate is essential. Gar sets a high bar for intellectual work and discussion. His views are very influential among a broad range of activists and theorists interested in cooperative development; community revitalization; and building a just, green, and vibrant economy. I look forward to this on-going dialogue as we both work together in addressing the challenges of our country.

Gar makes a critical contribution on issues of democracy, ownership, inequality, and system change in America Beyond Capitalism. The fundamental issue he does not address is how our manufacturing capacity has been destroyed over the last 30-40 years by the same sector responsible for income inequality and what we should do about it. This powerfully destructive trend gave rise to deep urban and rural poverty as we know it, as well as to a cultural stagnation in our society that has reduced us to consumers and speculators. It is reflected in the deterioration of our public education system that now can’t even meet the demand of advanced manufacturing companies for high paying, interesting, and secure jobs, while millions of young people face hopeless futures.

Meanwhile other countries have mobilized their governments as well as private and public sectors to compete to be leaders in global manufacturing. Without a huge American initiative to rebuild and rediscover our manufacturing sector, the problems that Gar describes become even more acute in the next 10 years as the United States is pushed to the sidelines of the global economy. I only wish Gar had explored in this book the huge opportunities in our society to re-define the dynamics and purpose of growth in a way that meets the deep economic, social, and environmental needs of our people and in a way that will strengthen the democracy that he champions.

Gar sees the decline of the strength of the labor movement as the signal for the necessity of a new progressive movement with a new and different institutional foundation. Without a strong labor movement the traditional progressive movement is without strength, he maintains. The “democratization of capital” must begin at the community level, leading to state and federal transformations—a process that can be accelerated by new conditions that may arise. Gar, in the Introduction to his book, cites the Evergreen Cooperatives Project in Cleveland—with its laundry servicing local anchor institutions like the Cleveland Clinic, its weatherization and solar installation business, and its hydroponic greenhouse—as an example of the new democratic institutions that can possibly create the foundation for the new progressive movement. These efforts are inspired by Gar’s interpretation of Mondragon as an example of the democratization of capital. Gar cites the number of ESOPs in this country, the growth of social enterprises, and other Evergreen-like efforts around the country. He points to the importance of the linkage of these efforts to broader community structures—not coops only accountable to their worker owners. He sees this as the essential beginning of a long, slow developmental path that—similar to the civil rights movement in the 40s and 50s—will give rise to an explosive movement at some point in the future, hopefully before the greater domination of right wing “friendly fascist” movements in our country.

Despite Gar’s intent, this sole focus on democratization of corporate wealth misses the major point regarding the source and character of the crisis in our communities—the loss of manufacturing companies, manufacturing jobs, and the culture of innovation in production in our society. He underestimates the volatility and danger we face in this decade if we fail to rebuild and transform our manufacturing base. And he underestimates the enormous opportunities for transformation that are also present in this period if we build a movement for manufacturing driven by the values of sustainable and restorative development. He focuses on important issues that are required in the discussion for transformative change but insufficient to effect that change by themselves.

We faced a dramatic change in the social contract in the 1970s. A powerful segment of the private sector abandoned its responsibility for the care and development of our productive capacity. It sought the highest return in the shortest amount of time no matter what the damage to the manufacturing sector and society as a whole. It used new Information Technology to gather huge amounts of data for speculative purposes and to shift capital quickly to anywhere in the global economy. This powerful group of financial capitalists—the “Low Roaders”—oversaw the destruction of America’s productive capacity—beginning with the thousands and thousands of company closings and the loss of millions of manufacturing jobs—including those at Youngstown Sheet and Tube in 1977—an early chapter in the development of Gar’s thinking. It was these events and their ripple effects that gave rise to the crisis in community that Gar describes. Later these same values and essentially the same technology was to be used in other profoundly destructive ways in real estate speculation, exotic financial investments, and in the architecture of our major financial and investment institutions that gave rise to the Global Financial Crisis of 2008.

Unfortunately, leaders in the broad public sector—in government, in community, and labor—didn’t recognize the violation of the social contract and its consequences in the 1970s. Under the traditional social contract, the public role was focused on redistribution of wealth, improving the conditions of work, regulation as a means to block or minimize socially or environmentally destructive practices, and sustaining and expanding a social safety net. The private sector guided and made the decisions on all aspects of making things and creating wealth—serving as the steward of our productive capacity. In the 1970s, powerful parts of the private sector abandoned this role of stewardship requiring the public sector—ready or not—to step into those responsibilities to develop and protect our productive capacity as well. The public sector overwhelmingly failed to respond—sticking to its traditional role of redistribution and regulation, or hoping for a major federal intervention in one form or another. Gar’s recent work remains stuck in these traditional zones with some experimentation and different thinking around the edges. The examples he gives in America Beyond Capitalism of efforts by community organizations, community development corporations, ESOPs, and labor remain firmly within those traditions. The embrace of Mondragon by the Steelworkers was a promising initiative but has yet to have real application as far as I know.

A few general comments:

1. Mondragon’s founders had a deep commitment to manufacturing as the foundation for the regional economy, the context for economic democracy, and the development of a modern and sustainable community. This same combination is reflected in the development vision and history of Emilia Romagna in northern Italy—another critical site for study by those seeking new models. Those—including Gar—who champion Mondragon as the model we should follow—are for the most part silent on this key aspect of Mondragon. He and others who champion cooperative development and economic democracy have tended to interpret Mondragon to the world with a focus on the cooperative aspect, and ignoring the manufacturing heart of the Mondragon development vision.

2. The issues of production, innovation, and growth are central to a transformative vision of economic development for our society. In this context, issues of democracy, participation, community development and equity, the environment, the opportunities for labor, the role of government, and the responsibilities of civil society become critical. Organizations with an “equity” agenda are missing a huge opportunity when they avoid these key themes.

3. Gar recognizes the huge differences that exist between the 13,000 publicly traded companies and the 8 million privately held companies in our country in his interview with the Capital Institute.[2] Yet in this interview and other writings such as Community Stability and the Challenge of Climate Change[3] he doesn’t advance any specifics on working with this privately-held sector. This sector in small and medium-sized manufacturing companies is moving decisively into advanced manufacturing requiring an embrace of innovation in all aspects of production and requiring a partnership with a competent public sector. In this framework, the potential for a true private public partnership driving innovation in production as well as society as a whole becomes possible, as well as the re-development of communities so devastated by de-industrialization in the 1970s and 1980s. If we can truly see a private/public High Road partnership that includes private owners; cooperative owners; community leaders; Republicans, Democrats, and Independents; as well as labor and management—we suddenly have the basis for a new kind of optimism about a new scale to our efforts.

4. Gar sees the decline of the labor movement as a key factor in requiring that progressives need to embrace the vision of the Public Commonwealth. He cites a study by Michael Wallerstein on how the “large scale and huge labor force…made union organizing difficult and expensive.”[4] Why would growth in the size of the US working class be an insurmountable obstacle for the leadership of the US labor movement? Starting in the 1970s, the US labor movement faced a qualitative change in the US economy. They faced plant closings, huge layoffs, and concession bargaining. They failed to develop an appropriate strategy for that change and paid the consequences as they became weaker and weaker. Today we have unions and their federations starting to make that change in strategy and leading in the rebuilding or our economy. The Chicago Federation of Labor was a leader in the creation of the Chicago Manufacturing Renaissance Council ( that was formed to essentially implement the recommendations of an earlier CFL/CLCR study, Creating a Manufacturing Career Path in Cook County in 2001[5]. The Chicago Teachers Union was on the design team that created Austin Polytechnical Academy ( in 2005 representing cutting edge reform in public education linked to the opportunities in manufacturing. The California Federation of Labor is playing a leading role in the San Francisco Bay Area Manufacturing Renaissance Council along with the California Teachers Association. And we have the United Steelworkers of America in its interesting connection with Mondragon. A new strategic direction for labor focused on rebuilding our productive capacity and leading the reform in our major educational and public institutions will increase its size and influence dramatically.

5. As I am, Gar is skilled in staying positioned and focused during long periods of incremental change. On the other hand, I believe we are in a period that has greater potential for transformative change in America than any time in the last 100 years. With a program that is guided by a commitment to manufacturing, growth, innovation and equity; as well as recognizing a much broader array of strategic and tactical allies, we may see an explosive moment in our future. If our thinking, our actions, and our alliances are big enough, we could set the stage for a new American economy that is anchored in a commitment to social, economic, and environmental sustainability and restoration more than any of us could have imagined even 10 years ago.

I invite Gar to join me in applying his visionary talents to America’s modern advanced manufacturing sector. I’m looking forward to the sequel to America Beyond Capitalism.

Note: Author Dan Swinney is the Executive Director for the Center for Labor and Community Research ( as well as the Managing Director of the National Manufacturing Renaissance Campaign. He founded Austin Polytechnical Academy ( inspired by the history of Mondragon that was also first started with a polytechnical school that combined the skills of leading manufacturing with the values of democracy and community development.

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