- All politics is local, it is often said. But what about economics? Politics in this country, Americans like to believe, are participatory and democratic. But what about economics?
--Berkshire Eagle, 1992
On the domestic front, the lack of job creation and the movement of economic activity beyond our national borders have become driving issues this election year. Decrying "Benedict Arnold CEOs," the country is resuming the long-truncated conversation about the effects of the global economy on people's lives.
So is New York City, where unemployment stands at 8 percent and serious economic hardship persists. Half of working-age black men, the Community Service Society recently found, are without jobs. Some sectors of the economy have taken hard blows from globalization: In 2002, the city's employment in apparel manufacturing was only 36 percent of what it was in 1990.
New York is awash in plans that promise to bring jobs--or on the flip side, threaten to push out businesses and their employees. Neighborhoods from Long Island City and Williamsburg/Greenpoint to the West Side are seeing proposals to significantly alter their economic and residential landscapes.
Policy discussions about jobs in New York City typically center on either footloose corporations or the potential of urban redevelopment to promote job growth. But what we haven't yet heard is a serious conversation that brings the two together--and asks what we can do as a city to shape our own economic environment. To that end, there is one course of action that deserves serious consideration: Investing in enterprises that truly belong to New York City because they are owned and run by New Yorkers themselves.
New York's economic development policies have long assumed that companies are likely to pick up and move their operations elsewhere. From the Koch to Giuliani administrations, government has responded to companies' willingness to flee by subsidizing finance, media and other big-dollar sectors through "corporate retention deals" or large-scale developments (think Metrotech). Compared to its predecessors, the Bloomberg administration has decreased the number of giveaways to large corporations, but it has launched ambitious land-development projects, including significant office and retail space, in Fort Greene, the West Side and elsewhere.
Yet despite these forms of corporate welfare, the city's economy has not kept pace with the nation's over the past quarter century. To some extent, New York's economic development policies are structurally self-defeating. If the public sector, rather than individual businesses, absorbs the costs of locating in the city, then individual businesses will have invested less here--which makes them much more willing and able to move. Through policies designed to deal with capital mobility, we are actually creating the conditions for flight. We are enabling a self-fulfilling prophecy.
Criticism of existing economic development policies has been mounting--most notably from Good Jobs New York, Pratt Institute Center for Community and Environmental Development and the Center for an Urban Future (City Limits' affiliated policy organization). But even some of this productive criticism fails to fully come to grips with the implications of New York City's place in the global economy. The critiques have largely focused on creating economic development policies that enhance diversity in the economic functions carried out in the city. But this does not go far enough. The deeper issue is that our economic policies are still organized around doing what's good for corporations. Debates are reduced to questions of which policies make the city most attractive for entrepreneurs. We are left tethered to the principles and objectives of those businesses, rather than to a broader definition of civic priorities.
As we tackle the problem of persistent unemployment, we have a precious opportunity to ask what kind of city we want to live in, and what forces should be shaping the character of our neighborhoods. And we absolutely have to ask if there are better ways to keep local economic activity anchored, and growing, in New York City.
How do we create businesses that are not prone to pick up and leave? One way is through ownership by a place-defined entity, such as a municipal government or community-based organization. These entities might shift locations slightly or expand their turf. But they are not going to relocate to the maquiladoras or China.
A second option is collective ownership. For while individual owners may relocate, retire or die, a collective of owners is much less likely to do so. Collective ownership alters the economic calculus of decision-making in firms. That's because there is a difference between being profitable and profitable enough. The former is required to remain in business. The latter is needed to satisfy the investment decisions of larger, multi-plant firms. A local collective simply needs to be profitable.
Collective ownership would also broaden the range of owners of wealth in the city. New York City has a breathtakingly unequal distribution of wealth--even by American standards. Collective ownership would begin to address this unsustainable situation. Along with broadening wealth comes a broadening of control. Worker-owners have much greater say over the decisions that effect their daily lives than do regular employees.
This is not some bizarre, quixotic idea. Collective ownership is a growing phenomenon in the United States, and worker-owned firms are now an integral part of the American economic landscape. While a few of these are large, multi-plant corporations--such as Publix supermarkets in Florida--most are small entities. A classic example is Marland Mold, a plastic mold-making plant (very "old economy") in Pittsfield, Massachusetts, which was slated to be closed in the early 1990s by its multinational corporate owner. The town rallied to help the workers buy the plant, and it has been growing ever since. The local newspaper led the charge (its comments are the opening remarks in this essay). Nationwide, groups such as PolicyLink, the Grassroots Globalization Network, Institute for Community Economics, Industrial Cooperatives Association, and many others, offer technical assistance--and in some cases a revolving loan pool--to make these collectives possible.
While the cost of land may make some of these forms of ownership difficult to realize in New York, many of them are already here--especially in the realm of cooperatively owned housing. The city is home to most of the limited equity co-ops in existence in the country, and the Urban Homesteading Assistance Board and other local organizations have no shortage of know-how. [Note: UHAB is a sponsoring organization of City Limits.] We also have one of the best models of worker co-ops in the country: Cooperative Home Care Associates in the South Bronx.
Collective ownership is hardly a panacea. Like all businesses, these enterprises can fail, and even when they are healthy, tensions between workers and management sometimes mirror those in more mainstream businesses (and creating unions in such firms is important). But in the end, these are viable ways for us to create a city that's connected to the global economy--and which can transform those connections. How we understand "the economy" and "the city" would itself be changed--in ways that open much greater space for community, democracy, and an equitable distribution of wealth.
James DeFilippis is author of Unmaking Goliath: Community Control in the Face of Global Capital, just published by Routledge, and assistant professor of Black and Hispanic Studies at Baruch College.