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5 hours ago
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American families are exhausted. They deserve a government that chooses them over billionaire donors. The Republican budget plan that passed the House last week calls for $4.5tn in tax giveaways for the ultra-rich and corporations. It will be paid for with enormous cuts to Medicaid, food assistance and other federal programs that serve our families and the working class. These are the folks Elon Musk refers to as the “parasite class”.
The agenda of the billionaire president and the richest man in the world is crystal clear: making the rich richer while working families struggle.
Our democracy is dominated by the ultra-rich because our economic system concentrates ownership and investment power into their hands. Extreme inequality is often addressed by doing one of two things: redistributing wealth, via taxes and social programs, or changing laws and policies to increase worker incomes, such as raising the minimum wage. While these strategies are certainly necessary, in both cases our economy’s core institutions – the multinational corporations, banks, pension funds and hedge funds – are left to run as usual. But this is where so much power in the US lies.
There is a third option: creating a democratic economy that widely distributes the power that comes through ownership and decision-making.
In a democratic economy, ownership is extended beyond the wealthy few, to public and private institutions, such as cooperatives and non-profits, driven by the interests of ordinary people. In many worker cooperatives, for example, the workers own the firm and elect the board on a one-member, one-vote basis. This makes power on the shop floor and pay scales much more equal.
The groundwork of a more democratic economy can already be seen across our country, in community land trusts, community development corporations, multi-stakeholder cooperatives, community development credit unions, housing cooperatives, community solar arrays, municipal broadband and the public Bank of North Dakota, which has operated successfully for more than 100 years. Glimpses of a new economy are there within the cracks of our failing system.
We have also seen political crises provide opportunities for larger scale public ownership. In the wake of the 2008 crisis, the US government became the largest shareholder of General Motors, Citigroup and American International Group. While these stakes were eventually sold back, the next time, instead of bailing out failed businesses, we should transition them into democratic public ownership at the municipal, state, or national levels. Other firms might be converted into worker cooperatives or multi-stakeholder cooperatives, governed by workers, consumers and community representatives, ensuring those same groups benefit from the company’s operations. And monopolized banks and large asset managers can be converted into democratic regional and local public banks that serve communities rather than shareholders.
Beyond crisis moments, which this government is sure to produce, new public options can be established or expanded in industries such as education, childcare, housing, pharmaceutical development, healthcare, asset management and more. These public options can provide needed goods and services at prices accessible to all, while injecting competition into monopolized industries.
From Los Angeles to New York, for example, there are dozens of grassroots movements across our country building public options for finance. Democratic public banks and public asset managers are not run by a corporate board at the command of profit-driven shareholders lounging on yachts somewhere on the other side of the world. Instead, democratic finance draws people from across a community, through processes of random selection, election or appointment, to deliberate over and make binding decisions about how pools of assets should be allocated and invested. Without shareholders or marketing expenses, and often tax exempt, these forms of democratic finance can offer much lower-cost loans and services to working people.
Powered by democratic mandates, they can make investments in renewable energy, affordable housing, community wealth-building and other institutions that meet people’s real needs. The Detroit Justice Center, for instance, is working to develop community land trusts, which are non-profits that establish community control of land and permanent affordability of housing. Democratic public banks, such as those promoted by the Public Banking Act of 2023, could provide a ready source of capital.
In a democracy, power should be in the hands of workers, community members, and democratically accountable representatives – not billionaires who govern to enrich themselves. The Republican budget is the natural outcome of an economy that funnels power and wealth to elites, while leaving working people to fend for themselves. Let’s show the billionaires we can build a democratic alternative to their corporate oligarchy.
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Rashida Tlaib represents Michigan’s 12th district. Michael A McCarthy is the director of community studies at the University of California Santa Cruz and author of The Master’s Tools: How Finance Wrecked Democracy (And a Radical Plan to Rebuild It).
