SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
democracy collaborative
We Need to Topple Wealth Supremacy
This 15th anniversary of Lehman Brothers’ collapse is an opportunity to take a step back and look at the overarching problem here: “financialization.”
Sep 13, 2023
It’s been 15 years since the collapse of Lehman Brothers.
The investment firm’s startling downfall marked the beginning of a historic Wall Street crash that swiftly wiped out over $7 trillion in home equity and $2.8 trillion in retirement portfolios.
Wall Street hasn’t fundamentally changed its behavior. Since then, Big Finance has engineered an even more entrenched system of creating wealth mostly for the ultra-rich while spinning out crisis after crisis for the rest of us.
Recognizing wealth supremacy helps us see our task: to build an economic system designed not for maximum investment returns, but for life to flourish.
That system has led to insecure, low-wage contract jobs replacing stable work, staggering debt mounting for college graduates, and monopolies crushing family businesses. It’s entrenched a political system captured by billionaires and corporations and left society struggling to meet the challenge of climate change.
This anniversary is an opportunity to take a step back and look at the overarching problem here: “financialization.” While we used to have an economy that manufactured stuff, now it manufactures debt.
Before 2008, big banks financialized mortgages. Now they’re financializing houses, buying up single family homes and charging high rents, scrimping on maintenance, and pursuing aggressive evictions.
The same is happening from healthcare to the local news, as private equity firms buy up vital businesses, cut staff and services to pad profits, and then sell their assets for scrap when the businesses predictably fail.
The latest Wall Street game is to turn the planet into a new asset class, creating “natural asset companies” to monetize “ecosystem services” from water, forests, coral reefs, and farms.
What drives financialization is what I call “wealth supremacy”—a bias ingrained in our economic system that tells us wealthy people matter most. It suggests the core aim of our economy should be delivering ever-increasing gains to their investment portfolios.
This bias is embodied in a series of myths. There’s the myth that no amount of wealth is ever enough. Another is that only shareholders and executives should have a say in corporations, while workers are disenfranchised and dispossessed.
Then there’s the myth of the free market, which tells us corporations and capital must be able to move freely throughout the world, while the freedom of people—democracy—must be subordinated.
Recognizing wealth supremacy helps us see our task: to build an economic system designed not for maximum investment returns, but for life to flourish. My organization, the Democracy Collaborative, calls it a “democratic economy”—and it’s rising all around us.
For starters, corporations don’t have to be owned by shareholders or executives. They can be owned by workers themselves.
Already workers in the U.S. own some 6,000 companies. Employees at worker-owned companies like the New York City-based Cooperative Home Care Associates and the San Francisco-based waste disposal and recycling company Recology enjoy more stable jobs and double the retirement savings of employees at conventional firms.
Nor do big banks need to do all the banking.
Roughly 1,000 community development financial institutions provide fair loans to marginalized communities typically shunned by Wall Street banks. For example, River City Credit Union in San Antonio, Texas, helps immigrants set up bank accounts so they don’t have to rely on predatory payday lenders and check-cashing storefronts.
And what if more of us owned our utilities?
Eighty-five percent of Americans already get their water from public utilities instead of for-profit companies. Now there’s a growing movement from Ann Arbor, Michigan, to Maine and New York for publicly and cooperatively owned energy utilities. Such companies could be more willing than for-profit utilities to transition quickly from fossil fuels and make investments to prevent sparking wildfires.
The models and pathways we need exist around us. But making the rapid, systemic change we need requires letting go of the myth that wealth-maximizing capitalism is the only system possible.
It’s not. And if we want to keep our society standing, we need to topple wealth supremacy.
Keep ReadingShow Less
Report Details How Community Utilities Can Usher In Green Energy Transition
"We have a powerful tool to accelerate the energy transition in a way that builds community wealth and energy justice in our communities: publicly and cooperatively owned utilities."
Apr 18, 2022
Publicly and cooperatively owned utilities offer a better transition path to a fossil-free power grid than their corporate-owned counterparts--as long as they are properly reformed and regulated--the authors of a report published Monday argue.
"It is time to reignite the radical history of community utilities to herald the transition to a genuinely democratic, equitable, and clean energy system."
The report--by Thomas Hanna, Johanna Bozuwa, and Raj Rao of the Democracy Collaborative and Climate and Community Project--found that community utilities "are better suited for a 'Green New Deal'-style transition than for-profit corporate utilities."
However, the authors also contend that "many community utilities as they currently exist must be significantly reformed to fulfill their full potential."
"The United States urgently needs to transition off of fossil fuels and onto clean sources of energy (especially renewable energy) to maintain a livable climate," they assert, noting that "as of 2020, only around 20% of U.S. electricity generation is from renewable energy sources."
"Energy utilities--the companies that run our power systems--have enormous control over the scope and scale of the transition, but have often dragged their feet or even fought against clean energy," the report continues. "Not only does their inaction imperil the very future of humanity, but it directly harms families--often Black, Indigenous, low-income, or otherwise marginalized--who live in the shadow of toxic power plants."
\u201cOur latest report w @ThomasMHanna @johannabozuwa + Raj Rao takes a deep dive on our existing public + coop utilities. \n\nWe already own 30% of the energy utilities in the US. Time to start acting like it. Check out recommendations below \ud83d\udc47\ud83d\udc47\n\nhttps://t.co/SEO6jb4YwZ\u201d— Climate and Community Project (@Climate and Community Project) 1650297634
"The current U.S. energy system is dirty and expensive," the publication states. "Thirty-one percent of households in the country have to make the choice between buying groceries or paying their energy bills. In response, communities across the country are beginning to mobilize to demand an energy transition."
The authors stress that "we have a powerful tool to accelerate the energy transition in a way that builds community wealth and energy justice in our communities: publicly and cooperatively owned utilities."
According to the report, around 30% of U.S. households are currently powered by community utilities, whose historical roots the authors call "radical."
"In the early days of electrification 100 years ago, residents across the country rose up against profiteering private utilities who provided poor (or nonexistent) service at high prices by creating their own publicly and cooperatively owned utilities," they note. "In the state of Nebraska, for instance, they kicked all private utilities out of the state for good. To this day, there are no private utilities providing electricity to Nebraskans' homes."
\u201c\ud83e\udd70 this image that shows what we can be building toward. This doesn't come without hard-won fights and intransigence. But it is worth it for a new conception of our energy system, owned for the people, by the people.\u201d— Johanna Bozuwa (@Johanna Bozuwa) 1650295362
The report also cites the Franklin D. Roosevelt administration's Rural Electrification Administration, a New Deal program that boosted the electrification rate from 10% to 90% in a decade as farmers united to start their own electric cooperatives.
"It is time to reignite the radical history of community utilities to herald the transition to a genuinely democratic, equitable, and clean energy system," the report's authors assert.
The report lays out a nine-point plan for community utilities to realize their full potential. Blocking privatization, setting incentives and mandates for renewable energy, establishing public banks and financing, and boosting democratic governance are some of the steps the authors say are crucial for success.
\u201cAnd send the bill to the billionaires, banks, & plastic-churning mega corporations who have us locked into this system with their investments!\u201d— Jackie Fielder (@Jackie Fielder) 1649808500
"Community utilities are much better suited to support a just and equitable clean energy transition than for-profit corporate utilities," said Hanna.
"However, many must be reformed and democratized to fulfill their potential," he added. "Alongside (and integrated with) larger public interventions and institutions in the energy system (such as regional public power producers), community utilities can play a prominent role in the clean energy future we desperately need."
Keep ReadingShow Less
All Health Is Public Health
The pandemic has blown up the myth that our health is largely a product of individual choices and personal responsibilities.
Mar 20, 2021
For decades, we have been sold a myth of private health. It is a myth that our health is largely a product of individual choices and personal responsibilities. It is a myth that our healthcare is a service that private corporations can provide, and for which we must pay to survive.
But the COVID-19 pandemic has blown up this myth.
Our personal health cannot be separated from the health of our neighbors or our planet. Nor can it be separated from the structural factors and policy decisions that have determined our health outcomes long before we are born.
The right to health, in the context of these interconnections, is a universal right. Your life is worth no more and no less than that of your next-door neighbor because the fates of the two are so intimately entwined.
"Any strategy to reclaim public health for the public good must center social determinants and seek to increase public power across sectors of the economy responsible for the basic conditions of human life and the stability of our environment."
Today, the universal right to health is not held back by scarcity of resources or a lack of technology. On the contrary, the wealth of this world--invested well--could end the pandemic before the year's end.
Instead, we are held back by another myth: that there exists a trade-off between public health and the health of the economy. The assumption of this trade-off dictates that all public policy is subordinate to the great god of economic growth--even if it costs us our lives. The concept of private health grows out of this second myth, which makes a commodity of our bodies, and a market for essential healthcare services.
Indeed, public health systems around the world are structured carefully to serve a profit motive. Unsurprisingly, their outcomes are inequitable and insufficient, leaving poor and marginalized communities with no recourse to private health provision.
Drawing on the evidence of health impacts of the coronavirus pandemic and the impact of policy responses, the racial, gender and class dimension in the impact of the virus is undeniable. The raw reality of systemic fragility of both public health and economic systems in the North in dealing with the social crisis has also been brought to the fore. Those countries that have been successful--such as Vietnam, Cuba and New Zealand--viewed public health as economic wealth.
Once again, we return to the basic premise. Health, in all its dimensions, is a public good.
How can we deliver a world that reflects this simple premise?
The first step is decolonization. Countries in the Global South cannot deliver on the promise of public health when they are curtailed by neocolonial conditionalities that come along with philanthropic funding and multilateral lending. This top-down approach strips countries of their sovereignty over how to fund health services, privatizes health infrastructure and cripples social policy provisions.
Most of these countries assured universal health services as a matter of course in the 1960s and 1970s. Then came structural adjustment. The imposition of the Washington Consensus in the course of the 1980s and 1990s led to a radical reframing of the health sector as a profitable site of privatization and deregulation. The introduction of user fees and prioritization of imported, high tech-fixes forced millions of poor people to the margins, as "private health" became the norm. Provision in the form of "minimum packages" took priority over comprehensive primary and community health.
Public health, then, requires public ownership--a form of ownership that can deliver transparency and foster citizen participation in the delivery of healthcare services. Public sector clinics, homecare companies, and biomedical enterprises should be built to assure the production and distribution of essential medicines and medical technologies as well as healthcare services.
Free from the structural constraints of shareholder primacy and profit maximization, these enterprises will be able to prioritize preventative and curative technologies, fill gaps in existing treatments, and provide products at or below cost where necessary to meet public health needs.
Moreover, they can return revenue to public balance sheets, reduce inefficiencies, and create surge capacity for emergencies. Having a robust public sector infrastructure for the development, manufacture, and distribution of essential goods like medicines, personal protective equipment, and other medical instruments breaks the corporate monopoly over our supply of medical goods, reducing regulatory capture and increasing public power to demand equitable and universal access to critical health goods and services.
Health as a public good offers positive externalities for the economy and society. Even if we just follow the logic of narrow economic growth, a dollar investment in health in developing countries is estimated to result in between $2 and $4 in economic returns over time. And those dollars are best spent when communities and nations have the autonomy to prioritize their own needs and invest in long-term institution-building that will serve their communities for years to come.
Countries like Cuba and Vietnam have demonstrated that, even with modest budgets, developing a sovereign healthcare system that prioritizes primary and preventative care together with robust public health infrastructure can deliver first-rate population health outcomes. [Investing in public healthcare systems has been shown to contribute to better outcomes] than investing in privatized healthcare systems. Freeing the healthcare sector from market imperatives would allow for the recentering of primary and preventative care, planning for equitable access, and robust community health outreach--not traditionally the profit-making parts of healthcare delivery. Additionally, targeted workforce development programs can be created to meet community needs while providing stable, public sector jobs that are themselves an upstream investment in community health.
Reclaiming autonomy of the public sector by sovereign nations requires a shift from the current donor-driven vertical disease control programs most funded in prioritizing the needs of the community. Vertical interventions to eradicate single diseases are often costly and have been imposed on low and middle-income countries at the expense of horizontal enhancements of public health infrastructure that would serve whole populations over the long term and make local health systems more resilient. They also contribute to internal brain drain with skilled people leaving the public sector to work for higher pay in international and nongovernmental organizations.
"The COVID-19 pandemic has opened a window of opportunity to revisit and reevaluate the many myths that held up a broken system of global health. And in doing so, it has offered us the chance to deliver a truly global public health system: equitable, inclusive and people-centered."
Reversal of structural adjustment conditions and untying loans, donor grants and external funding from conditionalities is essential in reclaiming sovereignty in the national public health decision space. Complete restructuring of the global health governance mechanisms to ensure democratic representation in decision-making by every participating country, whether they are net donors or net recipients, is vital. Global health governance mechanisms must have measures in place to ensure that external influence exerted over countries is subordinate to national sovereignty, and that the activities of global health organizations without a democratic mandate are overseen and their impact held to account by national governments.
Representation of the most marginalized and communities most impacted by colonialism and structural adjustment on governance of global health and financial institutions is important for their priorities and perspectives to be included on the agenda and in development priorities. In addition, more community empowerment, participation, and co-planning in the process of deprivatization of healthcare services can aid in the democratization of healthcare and provide increased opportunities for transparency, citizen accountability, and oversight.
Hand-in-hand with the reclaiming of the healthcare sector for the public good should be the reclamation of essential services like water and power. Investments in public power and water--coupled with divestments from fossil fuels--would build both climate resilience and more equitable access to the basic infrastructure of public health. Amongst the greatest challenges to public health in many countries around the world are still infectious diseases like tuberculosis, malaria, and lower respiratory infections, all of which correlate highly to social determinants like access to clean water and good living conditions, air quality, and sanitation. Any strategy to reclaim public health for the public good must center social determinants and seek to increase public power across sectors of the economy responsible for the basic conditions of human life and the stability of our environment.
The COVID-19 pandemic has opened a window of opportunity to revisit and reevaluate the many myths that held up a broken system of global health. And in doing so, it has offered us the chance to deliver a truly global public health system: equitable, inclusive and people-centered.
A withering critique of capitalism is not enough. It is time to reimagine a world where human life and environmental sustainability are the first priority, and where that universal right to health is the basis for all public policy.
A system premised on this universal right--and powered by global solidarity--is not only possible. For our species to survive, it is necessary.
Keep ReadingShow Less
Most Popular