A new era for community wealth building
by: Neil McInroy, Sara McKinley, Jeff Sutton
Executive Summary
Every local government official, city leader, and activist in the United States understands a simple truth in this moment: too many Americans are hurting. Many are living through the most challenging time in their lives. Long before COVID-19 and the ensuing economic crisis, a growing number already felt left behind: Working longer hours for less pay; lacking access to healthcare, transportation, or healthy food; trying, against all odds, to save a few dollars out of each paycheck.
Now, we face a set of interconnected global crises—a pandemic, climate catastrophe, growing global instability—that only deepens the inequality felt by so many in our communities. Millions of laid-off Americans lost their life savings during COVID. Extreme weather, from floods to hurricanes to wildfires, continues to destroy vulnerable homes and neighborhoods. War and international conflict expose our fossil fuel dependence, leaving minimum-wage workers to spend an entire day’s paycheck filling up their gas tank. Each challenge is felt even more deeply in Black and Brown communities, which have been failed by promises of economic development and revitalization and cut out of the benefits of economic growth through redlining, disinvestment, and wealth extraction.
At the same time, the wealthiest among us have only grown richer.
As we emerge from COVID-19, the richest 1% of US residents—totaling just 1.3 million households—now hold more wealth than the bottom 90%. This is not a coincidence. It is the result of an economic system working as it was designed to: concentrating the vast wealth of our nation in the hands of a few at the very top.
We have reached a pivotal moment in US history— likely our best and final chance to simultaneously address this crisis of wealth inequality and the economic, social, racial, and environmental injustices exacerbated by it. Doing so will take courage and a radically new approach rooted in common-sense economic activities growing out of communities across the country. Transformational change is not only possible in this moment. It is demanded. We must fundamentally rebuild our economy from the bottom up—connecting together community-based solutions, and scaling them with supportive policies and frameworks.
Community wealth building is the answer.
First articulated by The Democracy Collaborative (TDC) in 2005, community wealth building (CWB) transforms local economies based on communities having direct ownership and control of their assets. CWB takes progressive elements across all sectors of a local economy, like community land trusts, worker cooperatives, public banking, anchor institutions and more—elements that have previously only existed as one-offs—and supercharges their power, connecting and scaling them in a systemic way through policy development, institutional design, and ecosystems of support that change people’s lives and the economic future of our communities. It does so in coordination with local governments, economic development teams, anchor institutions, labor unions, and community leaders: helping them work in harmony, identify what elements are needed, and see the big picture as they replicate successful new tactics.
CWB is a transformative new economic development model that is built for the moment. It is designed for leaders not satisfied with tinkering around the edges, and those ready to reset the system entirely. It is a model that challenges the failing approaches that have been widely accepted in American economic development for too long, and addresses wealth inequality at its core.
On the following pages, you will read how CWB uniquely meets the crises of our time. You will learn about the powerful historical context behind its ideas, from the early progressive and cooperative movements through to the civil rights movement. And you will see how this model is already reshaping cities and communities across the globe, including a landmark opportunity in Chicago. In this pivotal moment, CWB is ready to drive a fair, equitable recovery for every city and locality with the audacity to implement it.
The inequality and pain in our communities today are not new. Nor do they have one single point of origin. Our system has long been designed to extract wealth from our communities, resulting in: the concentrated ownership of assets in the hands of an elite few, disinvestment from our communities, attacks on labor and working people, degradation of our environment, and deeply institutionalized social and racial injustice. These currents flow through American history, and we have allowed each to grow stronger over time without sufficiently damming them.
In another moment of upheaval, the 1960s, political and social activists worked to address these interconnected challenges. In 1967, Dr. Martin Luther King Jr. famously noted: “When…profit motives and property rights are considered more important than people, the giant triplets of racism, economic exploitation and militarism are incapable of being conquered.” King observed that racial integration by itself would not be enough; without change to the economic system itself, he would simply be “integrating my people into a burning house.” He saw that to achieve true equality, every person needed to control their own economic future—and have a meaningful stake in the wealth we collectively create.
In the years that followed, movements for collective ownership and a more democratic economy grew at a local and national level. Activists including Gar Alperovitz, the future co-founder of TDC, pushed for federal legislation through the Community Self-Determination Act of 1968 (CSDA)—urging Congress to authorize community-controlled organizations that would supplement social services. Game-changing ideas like community land trusts (CLTs), community development banks, and worker-owned businesses organically sprung to life in communities ranging from Georgia and Ohio to the Pacific Northwest.
These individual, one-off successes were never amplified and replicated at scale. Despite the abiding need, through the 1970s to the 1990s, the American political establishment lacked the will and desire to deliver the radical jolt to the system. Liberal politicians and organizations largely remained committed to orthodox economic thinking, and the conventional social democratic framework ultimately gave way to neoliberalism—a globalized, deregulated system designed to maximize profit and shareholder dividend. This increase in corporate influence has stymied and undermined efforts to democratize our economy ever since.
In this critical moment, we have a chance to do something different.
Wealth inequality, which was already at historic highs, has exploded during COVID-19. While millions of Americans have lost their jobs, homes, health care, and savings, the wealth of billionaires has grown by $1.2 trillion during the pandemic. Every day, money flows from our communities—dollars hard-earned by working- and middle-class families—onto the stockpiles of an increasingly small group of billionaires, owners, and oligarchs. It is this simple: Far too much of our nation’s wealth, from businesses to homes to land, is in the hands of too few.
This challenge is structural and systemic. It will not be solved by mere regulatory tinkering within the confines of an economic system doing exactly what it intended to do: enriching those at the very top at the expense of everyone else. For too long we have relied on philanthropy, charitable nonprofit organizations, and federal and local programs of community revitalization and urban renewal to ameliorate the injustices ingrained in this system. While well intentioned, there is only so much that conventional “after the fact” regulation and spending can address in a context of fast-moving global capital, offshoring, and shareholder supremacy.
This moment requires a much more radical change. Decades from now, this will either be remembered as the moment tens of millions of Americans fell behind for good and we cemented an economy for oligarchs and the ultra-wealthy—or the moment we radically reinvented our economy, finally recognized the suffering of too many people, and built a truly just and sustainable future, where everyone has a genuine stake in the economy and the wealth we produce collectively.
Community wealth building is the path forward.
Community wealth building keeps hard-earned wealth in the hands of the people and communities that create it in the first place. Instead of extraction and exploitation, CWB creates an economy that produces equity as its everyday, natural function— and in doing so, shifts the behavior and attitudes of people, communities, cities, and potentially the United States as a whole. CWB replaces the focus on what our local economies have conventionally accepted and valued— growth based on trickle-down economics, incentives to attract large corporations, maximizing shareholder profit— with new progressive values and goals: communal ownership, justice, and shared wealth.
By keeping wealth in our communities, CWB addresses the interrelated challenges of our time. When workers are their own bosses, they are less likely to be laid off during a pandemic. When we invest in local green energy solutions, everyday Americans will no longer be at the mercy of gas prices that come from global instability. When public investment flows into housing, local businesses, and resources for Black and Brown communities—rather than the shareholders of corporate America—racial justice will finally be on the horizon. CWB is not revitalization with a new name. It is about a new way of organizing our local economies to ensure that they genuinely work for all Americans.
Elements of CWB are already being deployed in cities and communities all over the world: a worker-owned enterprise in the Bronx, a CLT in Georgia, a community bank in Ohio. What has always been missing from these one-off projects is the structure and strategy CWB provides: the ability to connect and scale across the whole local system, and ensure each progressive intervention works together in synergy to create a local economy greater than the sum of its parts.
