By Jonathan Michael Feldman and Jessica Gordon Nembhard
This special section is devoted to an analysis and discussion of democratic economic development as the foundation for a new way to organize communities. We hope to provide planners with inspiration, new ideas, concrete information, and tangible models and strategies. We want to expose planners to the richness and variety of the current discussions around creating a new paradigm, or set of ideas and practices, in community development. We have engaged several practitioners and scholars in a dialogue on these issues and the models they find to be viable alternatives. A new paradigm must stress the interrelationships among: access to capital; equal economic opportunity and economic inequality; education and training; access to technology; racial, ethnic and gender discrimination; power inequalities and corporate hegemony; networking, collaboration and cooperation; planning; and public policy. Short term or narrowly focused planning has proven ineffective. Thinkers like Paul Goodman, Malcolm X, and W.E.B. Du Bois who combined utopian vision with practical proposals to realize that vision inspire us.
The Reagan and Clinton Administrations, and neoliberalism generally, have emphasized the paring back of the state and with it the budgetary resources for planning. As a result, planners will find it increasingly difficult to carry out their professional duties in providing community services and promoting economic development, particularly that which leads to high quality jobs. These resource constraints are matched by what appears to be a weakness of community groups, social change organizations, and the progressive-left community. These groups collectively failed to marshal the political resources necessary to promote a progressive urban agenda within the Clinton Administration or the Republican controlled Congress. Some argue that corporate interests are so dominant in Washington that we can turn only to local and state interests. In some European countries, political decentralization has been promoted as a solution to national political stalemate, although some groups have been able to gain resources from the European Union to promote regional solutions.
It may be more productive to focus on why the progressive movement very often has failed to adopt strategies that would allow it to be on a path toward accumulating power. This path would involve developing new kinds of networks and institutions like cooperatives, national newspapers, and radio and television programs, that would help create a more powerful accountability system. By helping to develop cooperative networks of firms, planners would be able to create allies in the economic sphere that could help them achieve objectives. For example, cooperative networks, linked to universities’ innovative resources, could help create high quality jobs. Planners need to develop new skills in financing, organizing, and management to promote such networks. Progressive local governments can give planners the space to carry out this work. The existing resources of the progressive community, in unions, left media, community radio stations, churches, social welfare agencies, progressive intellectuals in the universities, and the like are more than enough to create the foundation for such new networks. The problem, however, is the lack of a coherent and progressive strategy to marshal these resources.
Traditional Community Development Practice
Traditional community development practice for disenfranchised communities often emphasizes the creation of microenterprises, jobs linked to the service sector, or the attraction of large outside corporations. Some new strategies target bench marking and the creation of training programs targeted at industrial jobs. These approaches have had varying degrees of success but do not address many of the issues we have outlined, especially when focused only on job creation.
First, the quality of work in these jobs often takes a back seat to the objective of merely providing jobs. The targeted jobs may be low paying, and fail to lead to higher-paid professional or primary labor market jobs, and wealth creation. Some may believe that this reflects “pragmatic” considerations about the skills of groups or the shortage of economic resources. On the other hand, we believe the problem also reflects the design of networks, mentoring programs, apprenticeship systems, and university linkage strategies. For example, in Sweden, a new information technology high school is attempting to form a direct bridge between immigrant communities and the highest waged technical jobs. The planning profession needs more training to develop inclusive workplaces linked to high skill requirements and dynamic growth. One solution is for progressive foundations to finance the training and hiring of industrial engineers, industrial relations experts and management specialists with a social economy vision.
Second, the new jobs may provide employment in the short to medium term but alienate ethnic groups (new immigrants or people of color) from true economic sources of power in society, e.g. employment in the professions, high technology and innovation-based jobs. Contributor Phyl Speser points out that high tech jobs are not always high waged (a point underscored elsewhere by Andrew Ross at New York University in his writings about New York’s Silicon Alley). As a result, unionization in high tech regions is important, as is labor-based work sharing and job redesign linked to democratic redistribution of the many forms of capital generated by high tech firms. Innovation is increasingly a major source of power and prosperity. The separation of ethnic groups from this new source of power has economic and political costs.
Third, the employment created can fail to develop meaningful benefits to general welfare if measured by its ability to promote the long term goals of a community, such as quality of jobs, environmental restoration, community development, housing renewal, affordable housing, asset and wealth accumulation, or anti-discriminatory practices. Contributor Alessandro Messina (of the social economy group Lunaria in Rome) points out the limits of micro-enterprises as integration tools. They often fail to address the scale of unemployment problems at hand. As a result, we also need to think about large firms and strategies for “scaling up” smaller companies through extension services, cooperative networks, union-based apprenticeship programs and other social interventions that think big and not small. For example, as contributor Seymour Melman notes, Mondragón cooperatives are directly integrated with financial and research and development institutions that they can influence and control. This contributes to the scale of growth and accountability systems that promote growth.
Access to Technology and Control of Innovation
The intersection among ethnic groups, high technology jobs (or jobs benefiting from organizational and technical innovations), and cooperative forms of organization is increasingly important. Some ethnic groups have uneven access to high technology jobs. At the same time other ethnic groups have begun to use their “ethnic resources” (defined by social capital, group identity, common language, etc.) as a foundation for high technology networks and cooperatives alike.
In thinking about the professions, Malcolm X, for example, supported the idea that African Americans should train or recruit engineers as key community economic actors. Interestingly, some immigrants from India and China (the so-called “elite” or “luxury” immigrants) have used the American higher education system and ethnic professional networks to secure the income, training and networks necessary for integration at a higher level. As ethnic engineers (through start ups and “spin ups”) in Silicon Valley, they are now key managerial actors driving a large part of growth in that region, and creating wealth for their community. The linkage of engineering skills, supporting finance, advanced manufacturing and cooperative forms can provide a foundation for integrating growth, economic integration, social inclusion and democracy. In contrast, many African Americans in the U.S. represent a disproportionately low proportion of the engineering profession (but a disproportionately high proportion of the prison population) and have been denied such a foothold.
Many grassroots organizations and community groups have promoted service-based or relatively low-skilled business as the path of least resistance. These sectors often are lower paid and afford few opportunities for job ladders. Yet if these jobs were to be linked with appropriate training and mechanization, improvements in productivity could follow and profits could then be invested in training and improved assessments of service delivery. Or, as contributor Victor Pestoff suggests, the cooperative linkage of consumers’ and workers’ interests could conceivably create a better foundation for both service delivery and improved worker conditions. At the same time, cooperative forms facilitate the introduction of new technologies, especially those that guarantee job security and worker inputs into decision making and quality control improvements (as suggested by Melman, among others). The benefits from linking innovation, workplace democracy, economic cooperation, and networking are many. The benefits from innovation need to be “collectivized” or “socialized” through more cooperative forms. This is important because otherwise only a few people benefit from the resulting wealth. Critics on the Left suggest that “Black capitalism” merely reproduces wage hierarchies or promotes backward sectors. Yet, few have linked cooperative governance, firm modernization (through innovation and job redesign), and disenfranchised communities.
Linking alternative planning or industrial engineering considerations, cooperative forms, new training systems and the like has proven difficult. One reason, underscored by contributor David Ellerman, is that there are serious ideological obstacles to promoting a cooperative economy. Du Bois found this to be true. Plantation hegemony in the U.S. stifled African American support for cooperatives and democratic development. Traditionally, planning and business school programs have given very little attention to scholarship on the subject of cooperative economics or industrial engineering. Instead, planners too often focus on the state. Business schools often myopically focus on market or financial economics, with little attention to engineering issues or democracy. Contributor Ewald Engelen suggests that political scientists have focused far too much attention on the state as an economic actor. The same can be said for planners. We need to move toward interdisciplinary thinking to mobilize cooperative economic forms.
Engelen’s comments raise an important question about the relative importance of political and economic strategies. We don’t want to neglect the political. It is true that social movements have invested much energy in developing welfare state provisions and that some state functions like education, infrastructure provision, and regulation of environmental hazards, are of pivotal importance. But we still need to focus on reducing fiscal waste and reapplying the resources to training, education and investment in new community enterprises (or support for a variety of industrial policies and industrial extension programs). The military budget is a key resource base that could help fund local development initiatives. Capturing these resources will require a new vision and new alliances built on economic and media capital.
Cooperatives can ultimately provide economic resources to mobilize claims on the state. Recent social movements show how the Internet and new media facilitate networks that create streamlined yet effective group actions. For example, a recent Internet-based movement against election irregularities in Florida mobilized 10,000 people in less than a week. This is a movement whose primary organizing staff consisted of one unpaid volunteer. On the other hand, the recent discussions about the role of “social capital” and “civil society” often fail to address the fact that some social capital (associated with the Left) may be better than others (associated with the Right). The real problem is a shortage in “political capital” and money to pay for education about and development of alternative socioeconomic models.
The Question of Power
Lack of economic power and wealth constrains the economic resources that promote political power and can limit who participates or has influence in a democracy. This is especially true in urban politics where disparities in power can be quite dramatic. Strategies for participation and even income redistribution will be insufficient if they do not give marginalized communities access to wealth generators. Cooperatives and economic democracy are important because they can help increase the wealth of poor communities and communities of color.
Traditional planners (even some radical ones) often do not address the question of how to systematically accumulate political power, and the dynamic relationship between economics and politics. We need to address the political opportunity costs associated with different economic strategies. One general proposition that can be used to evaluate community economic development models is that the control of the means of production, or access to professions and financial power instrumental in that control, is central to holding power in society. There are diverse forms of power, which are linked to the economic, political, and media (or other cultural) organizations. We therefore need a comprehensive theory about how to systematically accumulate power and not a theory about powerlessness, since powerlessness is itself contingent upon the ability of others to accumulate power.
Strategies are lacking to creatively link alternative media, democratic firms, and various social movements in a synergistic fashion. In sum, there is a need for a new paradigm that would revolutionize economic development practice to exploit innovations in cooperative settings. Models like the Mondragón Cooperative Corporation in Spain and the Cooperative Council of Quebec (Canada) come to mind. We will likely have to invent new institutions to promote these goals; for example, a new kind of university space that promotes synergistic organizing, industrial extension, cooperative business development, and media networking. We find hints of such movement at places like the University of Wisconsin, Madison; University of Massachusetts, Lowell; and University of Maryland, College Park.