This is the second post in a series of three. Click here to read the first.
The explosive force of Occupy Wall Street—and more than a thousand other local efforts—offers hope that a movement committed to long-term change might one day achieve a fundamental transformation of the American political-economic system. Quietly, a different kind of progressive change is emerging, one that involves a transformation in institutional structures and power, a process one could call “evolutionary reconstruction.”
The first post in this series reviewed emerging possibilities for change in the financial sector both nationally, and state-by-state. This part takes up health care possibilities, along with the democratization of ownership now quietly going on in communities throughout the nation.
That a long era of social and economic austerity and failing reform might paradoxically open the way to more populist or radical institutional change—including various forms of public ownership—is also suggested by emerging developments in health care. Here the next stage of change is already under way. At first, it is likely to be harmful. Republican efforts to cut back the mostly unrealized benefits of the Affordable Care Act, passed in 2010, provide one example of this. The first stages, however, are not likely to be the last. Polls show overwhelming distrust of and deep hostility toward insurance companies. We can also expect public outrage to be fueled by stories like that of fifty-nine-year-old James Verone who attempted to rob a bank in Gastonia, North Carolina last year—but only, he made clear, for one dollar. The reason: unemployed and without health insurance, Verone simply saw no way other than going to jail to get health care for a growth on his chest, foot difficulties, and back problems.
Cost pressures are building in ways that will also continue to undermine corporations facing global competitors, forcing them to seek new solutions. A report from the federal Centers for Medicare and Medicaid Services (“National Health Expenditure Projections, 2009–2019”) projects health care costs to rise from the 2010 level of 17.5 percent of GDP to 19.6 percent in 2019. It has long been clear that the central question is to what extent, and at what pace, underlying cost pressures ultimately force development of some form of single-payer system—the only serious way to deal with the underlying problem.
A new national solution is ultimately likely to come either in response to a burst of pain-driven public outrage or, more slowly, through a state-by-state build-up to a national system. Massachusetts, of course, already has a near universal plan, with 99.8 percent of children covered and 98.1 percent of adults. In Hawaii, health coverage (provided mostly by nonprofit insurers) reaches 91.8 percent of adults in large part because of a 1970s law mandating low cost insurance for anyone working twenty hours or more a week. In Vermont, Governor Peter Shumlin signed legislation in May 2011 creating “Green Mountain Care,” a broad effort that would ultimately allow state residents to move into a publicly funded insurance pool—in essence a form of single-payer insurance. Universal coverage, dependent on a federal waiver, would begin in 2017 and possibly as early as 2014. In Connecticut, legislation approved in June 2011 created a “SustiNet” Health Care Cabinet directed to produce a business plan for a nonprofit public health insurance program by 2012, with the goal of offering such a plan beginning in 2014. In California, there is a good chance a universal “Medicare for all” bill may be on the governor’s desk for signature by mid-2012. (Similar legislation passed by both the House and the Senate was vetoed by then-Governor Schwarzenegger in 2006 and 2008.) In all, nearly twenty states will soon consider bills to create one or another form of universal health care.
One can also observe a developing institutional dynamic in the central neighborhoods of some of the nation’s larger cities, places that have consistently suffered high levels of unemployment and underemployment, with poverty commonly above 25 percent. In such neighborhoods, democratizing development has also gone forward, again paradoxically, precisely because traditional policies—in this case involving large expenditures for jobs, housing, and other necessities—have been politically impossible. “Social enterprises” that undertake businesses in order to support specific social missions now increasingly make up what is sometimes called “a fourth sector,” different from the government, business, and nonprofit sectors.
Roughly 4,500 not-for-profit community development corporations are largely devoted to housing development. There are now also more than eleven thousand businesses owned in whole or part by their employees; five million more individuals are involved in these enterprises than are members of private-sector unions. Another 130 million Americans are members of various urban, agricultural, and credit union cooperatives. In many cities, important new “land trust” developments are underway using an institutional form of nonprofit or municipal ownership that develops and maintains low- and moderate-income housing.
The various institutional efforts have also begun to develop innovative strategies that suggest broader possibilities for change. Consider the Evergreen Cooperatives in Cleveland, Ohio, an integrated group of worker-owned companies, supported in part by the purchasing power of large hospitals and universities. The cooperatives include a solar installation company, an industrial scale (and ecologically advanced) laundry, and soon a greenhouse capable of producing more than five million heads of lettuce a year. The Cleveland effort, which is partly modeled on the nearly 100,000 person Mondragón cooperatives in the Basque region of Spain, is on track to create new businesses, year by year, as time goes on. However, its goal is not simply worker ownership, but the democratization of wealth and community-building in the low-income Greater University Circle area of what was once a thriving industrial city. Linked by a nonprofit corporation and a revolving fund, the companies cannot be sold outside the network; they also return 10 percent of profits to help develop additional worker-owned firms in the area. (Full disclosure: The Democracy Collaborative, which I co-founded, has played an important role in helping develop the Cleveland effort. See www.Community-Wealth.org for further information on this and many other local and state efforts.)
Another innovative enterprise is Market Creek Plaza in San Diego. There a comprehensive, community-owned project links individual and collective wealth-building through a $23.5-million commercial and cultural complex anchored by a shopping center. The complex has developed a range of social and economic projects that have resulted in the employment of more than 1,700 people. Its multicultural emphasis on the arts has helped create several venues for common activity among the local Asian, Hispanic, and black communities.
Significantly, these collectively owned businesses are commonly supported by unusual local alliances, including not only progressives, labor unions, and nonprofit and religious leaders but also, in many cases, the backing of local businesses and bankers. The efforts have also attracted surprising political support. In Indiana, for example, Republican State Treasurer Richard Mourdock has established a state-linked deposit program to provide state financing support for employee ownership. At this writing, Ohio Democratic Senator Sherrod Brown has plans to introduce model legislation to support the development of an initial group of Evergreen-style efforts in diverse parts of the country. Environmental concerns are also involved; many of the enterprises are “green” by design, increasingly so as time goes on. Cleveland’s Evergreen laundry, which uses less than a third the amount of water used by comparable commercial firms, is one of the most ecologically advanced in the Midwest. In Washington state, Coastal Community Action (CCA) operates a portfolio of housing, food, health, and employment programs for low-income residents that uses development and ownership of a fourteen million dollar wind turbine to generate income to support its social service programs.
Check back next week for part three of this three-part series.
Gar Alperovitz is the Lionel R. Bauman Professor of Political-Economy at the University of Maryland and co-founder of the Democracy Collaborative. He is author, most recently, of America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty and Our Democracy and, with Lew Daly, of Unjust Deserts: How the Rich Are Taking Our Common Inheritance. He is working on a new book on systemic institutional change. This article is adapted from a piece in Dissent Magazine.