Making Sense of the New Economy

Crossposted from Rooflines: The Shelterforce Blog

The phrase “new economy” can mean a variety of things to different people. To some, the phrase still refers to the adoption of new technology or the growth of the tech sector. Among progressives, however, it has generally come to mean, as John Cavanagh and Robin Broad put it a while back in The Nation, the movement to achieve “holistic, systemic change” in our economic structures. In a 2011 Nation article, Democracy Collaborative Co-founder Gar Alperovitz noted that new economy advocates seek “an economy that is increasingly green and socially responsible, and one that is based on rethinking the nature of ownership and the growth paradigm that guides conventional policies.” In the few short years since the term “new economy” has entered our lexicon, community economic developers have begun to consider how to incorporate community business ownership and other new economy concepts into their work.

The rise of what I’ll call the “new economy idea,” is, of course, directly related to the impact of the Great Recession. If there had been no Great Recession, quite possibly few would be talking about a new economy today. The Great Recession, among other things, provided a wake-up call that building wealth through homeownership, while important, was grossly insufficient as a strategy for community economic transformation.

Our field has yet to fully adjust to this trauma, which, among other things, wiped out more than $2 trillion of household wealth, about half of it in communities of color. Yet there are signs of change afoot, such as the themes of community ownership and control at last March’s People and Places conference.

A central idea stemming from that conference was the importance of inculcating the principles of “holistic, systemic change” into the heart of the work. This means, effectively, combining housing with business development to achieve more lasting and transformative results. Whether the mechanism is worker cooperative development like that done by the Center for Family Life in Brooklyn or a community-oriented business accelerator like Inner City Advisors in Oakland, there is clearly new energy in building community-based business capacity. Linking community development to health also has gained greater prominence, as more and more people, including researchers at the San Francisco Federal Reserve, have come to realize that health outcomes and community economic development outcomes are inextricably linked.

The response we received at the Democracy Collaborative for The Next System Project, which we launched only at the end of March calling for a national conversation on system change, also illustrates the hunger for new approaches.

So far, more than 5,000 people have signed a letter titled “Time to Face the Depth of the Systemic Crisis We Confront,” including: labor leaders like Leo Gerard of the Steelworkers; co-op developers like Hilary Abell of Project Equity; community development leaders like Angela Glover Blackwell of PolicyLink and Lisa Hasegawa of the National Coalition for Asian Pacific American Community Development; community organizers like Gopal Dayaneni of Movement Generation and James Mumm of National People’s Action; environmental justice activists like Deeohn Ferris of the Sustainable Communities Development Group; and community development corporation leaders like Steven Williams of The Partnership Community Development Corporation in Philadelphia. Additionally, more than 1,500 signed up for a free webinar on the Next System Project.   

A gathering held in Asheville, N.C., last month by the Business Alliance for Local Living Economies (BALLE) marks another step in this search for new strategies. The BALLE event was called a “Place-Based Impact Investment Summit.” At its heart, the idea was to bring “new economy” principles down to earth, by grounding the work in transforming specific places and in the need to confront present-day race, class and gender hierarchies in our work.  For example, Malik Yakini from the Detroit Black Community Food Security Network, a group that runs a 7-acre urban farm and is seeking to develop a consumer food co-op, noted that the majority of African Americans in Michigan live in communities under emergency management, where the state government appoints managers to run cities and schools that supplant locally elected leaders. In short, even formal electoral democracy has been strictly curtailed. Yakini called on event attendees to acknowledge and work diligently to dismantle the system of white supremacy and patriarchy in “every conversation we have on the new economy.”

Another theme that came from the BALLE convening was the importance of building an ecosystem of support to foster effective, community-based business development. Deborah Frieze and Aaron Tanaka highlighted their work with what they are calling the Boston Impact Initiative, which has developed a $5 million fund ($1.6 million deployed so far) that provides low-interest loans with flexible underwriting to support community business development, including worker cooperatives. More fundamentally, though, Frieze and Tanaka emphasized that their goal was not the lending per se, but “creating the conditions for communities of practice.”

Two years ago, confronting our nation’s landscape of structural poverty, the F. B. Heron Foundation declared that the world has changed and so must we. There is still a long way to go, but, as the above examples attest, perhaps a few steps along this path may be emerging.

(Photo credit: Fairbanks co-op market, Alaska’s first member-owned community grocery store, courtesy of the USDA on Flickr, CC BY 2.0)