One of the few working-class movements scoring victories, democratizing ownership, and gaining momentum is the method of economic development called Community Wealth Building (CWB). Colin Bruce Anthes interviews Neil McInroy of the Democracy Collaborative on how CWB works, what it has accomplished so far, and its potential to lead a “new common sense” movement beyond neoliberal capitalism.

• Transcript

Welcome to theAnalysis.news. I’m Colin Bruce Anthes. In a minute, we’ll be discussing the growth of community wealth building and its potential moving forward with Neil McInroy from the Democracy Collaborative. Please remember to like, subscribe, ring that bell so you get notifications, and consider hitting the donate button to support our work. Back in a flash.

The last 40-plus years of neoliberalism have seen precious few victories for the working class. The most affluent countries are now regularly characterized by economic crashes, intergenerational wealth gaps, high rates of suicide and depression, stagnating and even declining life expectancies, with the threat of global climate change thrown in as a bonus. But just under the radar, there actually has been a working class movement that has scored some impressive victories and gathered a surprising amount of momentum.

Community wealth building is a highly replicable method of economic development that brings together local procurement strategies with inclusive models of ownership for land and enterprise. It was first used to pull people out of poverty in a very poor part of Cleveland, Ohio. A larger version was then taken across the pond to the city of Preston, England, and Preston went on to be named the most improved city in the United Kingdom by PricewaterhouseCoopers. Since then, it’s gone a bit viral as an international movement.

Community wealth-building initiatives now pop up around the world, from small towns to major cities like Denver, Chicago, London, and Amsterdam. National governments are starting to pay attention as well. It’s made its way onto the $68 billion strategic plan for the U.S. Housing and Urban Development Department. It’s influenced the way the CHIPS Act on semiconductors was rolled out, while the Scottish government created the new position of a Minister for Community Wealth Building.

So how does community wealth building work? What challenges does it face as it looks to continue its expansion? Could it finally offer a path out of neoliberalism? To discuss this, we have one of its leading practitioners, Neil McInroy. Neil is a former CEO of CLES, the Center for Local Economic Strategy. He’s been an adviser to the Scottish Government on community wealth building, and he serves as the global lead for community wealth building for the “think and do tank,” the Democracy Collaborative. Neil, welcome to theAnalysis.

Nice to be here.

Let’s begin with Margaret Thatcher’s most haunting phrase. “Tina, there is no alternative.” I think a lot of people feel that over the past few decades, it hasn’t much mattered who they voted for. They’ve always ended up with some form of neoliberalism on the other side. Can you begin by speaking about how community wealth building offers a viable alternative to neoliberal methods of economic development?

Great question. Look, the fundamental woes that the world faces is down simply to wealth and power. Who has wealth? Where does it go? And how that wealth controls the very nature of how many of us, where we work, what we do, and how we nurture the planet with that wealth.

In simple terms, community wealth building is a correction to wealth and power. It’s not just a concept. It actually fundamentally seeks to rewire wealth and power through practical things we can actually do. We could start now, and we are starting now, so it’s practical. It’s step-by-step. It’s got a big attack on wealth and power, but we do it in practical ways. Chipping away. And that’s, I think, its strength. Many other great concepts that are alternatives, but community wealth building is a concept, but also a practical way of chipping away at neoliberalism and the questions of power and wealth.

Can you talk about some of the component parts? You talk about how there are different ways of chipping away, and we can get started very quickly. I think one of the things that make it something that can speedily be accessed is this element of procurement and talking about how procurement can play a role in changing the game in a local community very quickly. Can you talk a little bit about some of those component parts?

Yeah. It’s worth just mentioning that from my own experience working 30 years in economic development, I also shared that consciousness with millions and billions across the world– things are getting worse. We’re not dealing with the climate crisis, poverty, and so forth. The way that community wealth building practically does things is to think about wealth, the different pillars, and the dimensions of wealth. I devised a simple way of basketing up wealth, land, a huge source of wealth, finance, capital, if you like, huge sources of wealth, wages, and workforce, a huge source of wealth. Thinking about institutions, different types of enterprises, they’re a huge source of wealth. Also, of course, procurement and public spending.

Now, that is not these five pillars: workforce, finance, inclusive and democratic enterprises, work, and procurement. Now, the interesting thing about procurement, it’s not preeminently important; it’s one of the five. Procurement, particularly public procurement, that’s our money. That’s democratic money. It’s hard to influence commercial, private individuals, or private corporations’ money, but we can influence taxation. We can influence public money. Of course, that represents roughly 30% of the economy, which comes from that public money.

So what institutions, local government, national government, universities, colleges, hospitals, public institutions, how they spend their money is a particularly important feature. It’s particularly important to how we might change how the economy works and where wealth goes. So progressive procurement looks to start using that public resource. If a local government is buying a good or service, their question is then, “Well, how do I see that as starting to turn the dial on wealth and who gets that wealth?” Looking at local procurement, looking at firms who are not just extracting the surplus into the ether of the global economy, but nurturing the place, the environment, and also in terms of having ownership forms where wealth is locked in, employee ownership and co-ops.

So procurement, because it’s a democratically overseen part of wealth, it has an important leverage position in trying to see how we can shift the local economy through progressive procurement practice. 

I want to talk about some of those other structures that you were talking about. In some ways, these may seem like common sense points once they’re made, but a lot of the time, when the economy is discussed by mainstream pundits, there’s the discussion of capitalism and government. So you have these corporations with a few owners, and then there’s government over here that owns other things. There’s hardly any discussion of anything in between. There are lots of other kinds of structures than just a capitalist corporation and government ownership. That comes in, in a very important way, in this, does it not?

What we need to do is democratize our economy. That doesn’t just mean the state controlled. It means control partly by the state. In certain instances, it might be fit for purpose; this could deal with railways or whatever it may be. But it’s also that wider democratization of ownership, that plural forms of democratization.

Increasingly, certain sectors in different parts of the world, you can see it lend itself to particular forms of democratic ownership, either railways or perhaps state-owned railways. When it comes to things like childcare or some forms of everyday retail, this might lend itself to workers’ co-op or other forms of democratic ownership.

Community wealth building supports effervescence, a flourishing of those democratic forms because, by their very nature, they are not wealth extracting; they are wealth-generating in terms of the people who own those forms. So we should not see this as capitalism versus government, rather than capitalism versus democracy and democratization of the economy.

I think that there is some room here potentially to bring together different kinds of coalitions by bringing in those different options. There was a poll by the University of Chicago in, I think, 2019, and they asked 1,500 Americans what they would prefer to work for, a state-owned enterprise, an enterprise owned by outside investors, or a worker-owned enterprise. The results were pretty staggering– 72% of Americans said they would rather work for a company that was owned by its employees. But it wasn’t just that a huge number said that they would rather work for that. It was the demographics. It included 74% of Democrats, 72% of Republicans, 67% of independents, and a clear majority of black, white, gay, straight male and female participants.

We live in this incredibly polarized world where we see different political camps constantly at each other’s throats. Then in comes this other form of inclusive ownership that suddenly has very, very widespread appeal across the political spectrum. That opens up some doors.

Yes, absolutely. I think what you touched upon there is that, you said before, common sense. We all know, as citizens and as workers, that when we have more of a stake in something, a genuine stake, then it’s better for us. It makes us feel better. Also, in terms of cooperatives, we know that with a genuine stake, there are no distant shareholders. We are the shareholders, and we act in the interests of both making a viable, strong, growing concern but also mindful of the wider impact of that firm, that enterprise.

This is a common sense understanding. The thing is, though, is that I think the powers that be in neoliberalism don’t want these alternatives. There’s an intentional desire to squash them because it breaks the link between these corporations, excessive profits, and excessive shareholder dividends. So there is almost a natural bubbling up, as your figure has shown, of how people think employee ownership and worker ownership are a good thing. But there is a reaction, I believe, from political forces and from power and wealth and neoliberalism, who do not actually wish to see these things grow because it threatens their own power and wealth.

There’s a political tussle in community wealth building, which I think is an important dimension. Whilst I’ve said community wealth building is practical and you can get on and do things, there is also a political dimension if we’re really going to bring this to scale.

Yeah. We’ll touch a little bit more on some of the challenges that are faced in order to keep this movement expanding. Let’s go through a little bit more of the core practices. Then we’ll go into some examples of how this has operated in hands-on practice so far.

We’ve talked about employee ownership and cooperatives. We talked about local procurement. Then there starts to become this element in which these start to play together a little bit. You get more local investment happening in companies where the profits go into the hands of lots of local people. Then we’re talking about really seriously changing some trends. Do you want to talk a little bit about how these different pieces start to build into a complex?