The Wealth of Neighborhoods
While President Bushs ownership society only gives more to those who already have, a more equitable, progressive ownership society is taking shape at the grassroots.
President George W. Bush’s “ownership society” is a seductive idea: who wouldn’t want to become the owner of their home, health care, retirement, and destiny? From the “home on the range” to the adulation heaped on high-tech entrepreneurs, the concept is rooted in the American experience. No other nation places more value on the importance of individual autonomy. Ultimately, however, Bush’s promise of an ownership society is an empty one. In exchange for ownership, we receive increased risk while the wealthy and corporate interests benefit, as in his Social Security privatization plan. In Bush’s world, everyone gets a little piece of the pie, but at the cost of giving the wealthy extremely large helpings. Bush has, in fact, exacerbated a long-running trend: not only is income inequality greater in the United States than in any other advanced society, but the ownership of wealth is literally feudal in nature–and getting more so. The top 1 percent garners more income than the bottom 100 million Americans taken together. A mere 1 percent of wealth-holders, however, own just under half of all financial assets. A slightly larger group, the top 5 percent, own roughly 70 percent of all business assets. In 2003, the top 1 percent alone received 57.5 percent of all capital gains, rent, interest, and dividend income.
With recent rollbacks of the estate tax, incentives for retirement savings from which the well-off disproportionately benefit, and tax cuts that reward wealth, these inequities will only deepen. Morally, this is offensive to progressives and anyone with even a semi-serious conception of justice. Practically, this is troubling–and should be–to people across the political spectrum, because societies in which wealth disparities are so great are unstable societies. Divisions are magnified. The bonds of citizenship and brotherhood are weakened. The social fabric is frayed. A nation that begins down this path ends up with a country that begins to look more like a developing nation in Latin America and Africa: high walls keeping a restless and poor population out of sight and out of mind.
Decrying such inequities is nothing new. Yet, unfortunately, the progressive response of the twentieth century–redistributive tax structures and public assistance–no longer has the capacity to alter the dominant trends. Not only has income inequality continued to expand despite large-scale entitlement programs like Medicaid and Social Security, but there is little prospect that significant new programs will come into being any time soon. In a world of deepening deficits, an aging population, global competitive pressure, and persistent public skepticism of government, the appetite for the tax hikes and entitlement programs needed to rebalance these inequities is weaker than ever.
Although the redistributive door is largely closed, the ownership door is, in fact, open. Not ownership in Bush’s skewed sense, but rather ownership in a democratic sense through the possibility of community-based investment in, and control over, wealth creation. Employees, companies, non-profits, cities, and states are using diverse and innovative strategies to create community wealth. It is wealth that improves the ability of communities and individuals to increase asset ownership, anchor jobs locally, expand the provision of public services, and ensure local economic stability, rather than just boost corporate profits and shareholder fortunes. A common thread runs through the employee-owned firms, community development corporations, and even the traditional co-ops: the idea that real wealth equality can only be built by communal involvement in the means by which that wealth is produced. Such approaches provide ownership for millions of Americans–in many cases, through a tangible asset that can appreciate and be passed on to subsequent generations. Others create community wealth by enabling businesses and jobs to stay in the United States.
But more than that, these ownership strategies give people a real stake in their community, strengthening the bonds of citizenship and the connections between people, institutions, and places. These are not incidental by-products of a progressive ownership society; they lie at its core. A country where more people have a tangible stake and believe they can create better lives for themselves and their children is a strong society–and a strong democracy. “Necessitous men are not free men,” Franklin Roosevelt urged. Or as an earlier President, John Adams, reminded a young nation: “The balance of power in a society accompanies the balance of property.”
Interestingly, the idea of using investment strategies to benefit non-elites has been difficult for some progressives to grasp–it sounds too much like the other side’s programs. However, properly structured, such strategies can be a practical and effective way to combat wealth inequalities. Indeed, at the grassroots level, a progressive ownership society is already quietly taking shape–one that enables the poor, blue- and white-collar workers, and the middle class in general (broadly, the vast majority of perhaps the bottom 95 percent of American society) to create and gain the benefits of wealth ownership. These various strategies, and they are indeed very diverse, are beginning to change who gains from wealth ownership and investment. Some do it directly, helping low-income individuals increase savings and asset-holding. Others do it indirectly, but nonetheless importantly, by increasing the numbers of non-profit corporations that have established businesses to help finance neighborhood development or various social missions. Still others use municipal and state strategies to build community wealth. And all of these efforts are found throughout the country, in states “red” and “blue.”
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