Putting economic democracy into practice
By Joe Guinan
March 21, 2025
It was good to see the recent call, from Congresswoman Rashida Tlaib and sociologist Michael McCarthy, for economic democracy as a means to tackle poverty and inequality in the United States.
In their article, published in The Guardian at the start of this month, Congresswoman Tlaib and Professor McCarthy put things rather succinctly:
“Our democracy is dominated by the ultra-rich because our economic system concentrates ownership and investment power into their hands.”
The solution to our current economic malaise, they tell us, cannot come from dispensing from the table of the very rich the crumbs of their enormous wealth through modest taxes, or miserly increases to workers’ salaries. Instead it requires building an economy in which ownership and power are widely distributed and broadly held, and substantive economic decision-making belongs to us all and not just the billionaire few.
Today’s extractive economy
At The Democracy Collaborative we couldn’t agree more.
Today, our economic system is evidently reaching limits of which its dominant mindset cannot conceive. We’ve been brought to the brink by a long era dominated by the neoliberal agenda of tax breaks, deregulation, and “free” markets – in which the overriding aim of the economy, quite simply, is to extract maximum wealth for those who already have so much.
This extractive economy lies behind today’s overlapping crises. We can see this in the way financial wealth overpowers democracy, the way wages are held down and jobs automated to the point of nonexistence, the way the growth mandate overrides ecological boundaries and the planet’s capacity for resilience and regeneration.
To the extent that it does so at all, society still envisions managing this economy with tools from the past, such as the minimum wage, the countervailing power of trade unions, regulation in the public interest, and social safety nets. We do still need these, and they must be strengthened. But in the turbo-charged, globalized, financialized capitalism of our day, deploying only these is like erecting a picket fence in front of a bulldozer. These twentieth-century strategies have no chance in the face of giant multinational corporations and the tiny band of elites who own and control them.
“Instead of letting a fundamentally lopsided and amoral economy run its course and then seeking to correct the outcomes ‘after the fact,’ we need to reorganize its basic institutions and relationships to produce the better social, economic, and environmental outcomes we are seeking as a matter of course, through the system’s ordinary functioning.”
Instead of letting a fundamentally lopsided and amoral economy run its course and then seeking to correct the outcomes “after the fact,” we need to reorganize its basic institutions and relationships to produce the better social, economic, and environmental outcomes we are seeking as a matter of course, through the system’s ordinary functioning.
We need, in other words, a democratic economy.
Community Wealth Building as economic democracy
For us, at TDC, the road to this democratic economy begins right where we stand.
Much of our work as an organization has been dedicated to showing that this alternative paradigm is already in the making – a real, living economy being built from the bottom up in communities across the country and around the world.
It must now be moved from the margins to the mainstream, from the position of challenger to dominant model – and in short order.
Today, more than ever, Community Wealth Building offers a path towards systemic change, addressing inequality at its source whilst restoring and deepening democracy.
“The current crisis – systemic in nature – and this decaying system – incapable of being reformed but unlikely to collapse outright (at least for now) – are forcing the issue of political-economic system change onto the American agenda.”
TDC has a lot to say regarding not only the paths that brought us here, but also about some of the real solutions.
There are immediate and practical steps that people, including local and state leaders, can take to protect their communities and livelihoods against the current top-down onslaught. There are ways of forging a medium-term path out of crisis, by using Community Wealth Building methods and approaches.
Five pillars for transforming local economies
Community Wealth Building is premised on five pillars of direct intervention into local economies. These are:
Inclusive and Democratic Enterprise
Cities should have multiple forms of worker and consumer cooperatives, social enterprises, public ownership, municipal enterprise, and more, based on the recognition that the ownership and control of productive capital is at the heart of where power lies in any political-economic system.
Locally Rooted Finance
Cities and local institutions should redirect money in service of the real economy through public and community banks, credit unions, and targeted public pension investments.
Fair Work
Every worker should receive a living wage and real power in and control of their workplace to deliver decent work and conditions, and advance trade union rights.
Just Use of Land & Property
Cities should mobilize land and property assets to build real wealth in communities, bring local land and real estate development back under community control, and combat speculation and displacement.
Progressive Procurement
Local governments and place-based “anchor institutions” should lead with procurement practices that re-localize economic activity, build local multipliers, and end leakage and financial extraction.
Beneath these pillars sit a broad array of elements and institutions that, taken together, represent the mosaic of a democratic economy in the making.
Community Wealth Building practice is constantly evolving, and we are continually exploring its applications and its efficacy in our fast-changing political and economic environment.
Community Wealth Building emerged from a context of scarcity, austerity, and economic difficulty, and can readily be adapted and deployed by more struggling cities and communities – even states – in light of what we are going to be enduring from the federal level. Positioning Community Wealth Building in this manner is one of the urgent tasks facing advocates and practitioners.
If Congresswoman Tlaib and Professor McCarthy’s call resonated with you, join the Community Wealth Building movement and be part of this much needed transformation.
Our Community Wealth Building Action Guide offers pathways and first steps by which to get started in building a more democratic economy where you live in your own communities.