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The Future of Building Wealth

Family wealth building isn’t enough: We must pursue community wealth building

Centering community and place Expanding democratic ownership

Ted Howard and Sarah McKinley co-authored an essay, “Family Wealth Building Isn’t Enough: We Must Pursue Community Wealth Building As Well.” that was included in the book, The Future of Building Wealth, published by the Federal Reserve Bank of St. Louis and The Aspen Institute. An excerpt:

Ownership and control of assets is the foundation of every political economic system and largely determines who has access to wealth and power and who does not. In the United States, it is a well-known fact that asset ownership is concentrated to an extraordinary degree. As former Fed Chairman Paul Volcker warned in 2018, the United States is “developing into a plutocracy.” The COVID-19 pandemic is likely to exacerbate this trend. 

To address this growing wealth inequality, and in particular the racial wealth gap, we must build wealth in our communities, creating an economy where assets are broadly held and locally rooted over the long term so that income recirculates locally, creating stable prosperity. This requires us to think differently about asset ownership, particularly how conventional efforts to increase individual and family asset ownership intersect with new approaches around community and collective ownership of assets in place. Specifically, in addition to individual ownership forms — that have proven insufficient in our current economic system — we should develop plural ownership across the full spectrum of assets, resources, enterprises and services that, collectively, transfer wealth and power from the hands of the few to the control of the many.

One way to do this is what we call “community wealth building,” a term that The Democracy Collaborative first articulated in the mid-2000s to tie together the innovative institutions and approaches emerging in communities to offer a vision of new political-economic arrangement starting at the local level. Community wealth building (CWB) works to produce broadly shared economic prosperity through the reconfiguration of institutions and local economies on the basis of greater democratic ownership, participation and control. CWB is a new way of thinking about economic development, poverty alleviation and wealth creation and accumulation. However, its transformative potential is that it takes a full system view that focuses on developing alternative economic institutions that are broadly owned and offers new relationships and interventions at various scales throughout the local economy. The goal is not to simply tinker around the edges to attempt to even out the ill effects of our current, deeply unequal and unjust economic model but to instead pursue fundamental changes to the ordinary operations of the system such that it is capable of reliably generating positive outcomes in and of itself. 

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