Ruth Needleman: What is Community Wealth?

Dr. Ruth Needleman spoke about Maiaco in Gary, on 17 September at the Genesis Center in downtown Gary, at the King-Chavez Social Justice awards banquet held by the Northwest Indiana Interfaith Federation. Video below.

What is Community Wealth?

That is the Question.

Let me begin with the first principle of community wealth:

If it is made in Gary by Gary residents, then the money will stay in Gary and grow the community. That’s what produces community wealth.

Our economic system, very sadly, is built on the concept of making money in order to make more money. That is called capital accumulation, but it does not build the kind of wealth we value. There are those who equate money with wealth. For most of us, I believe, we think of wealth in broader terms, not just money, but our health, family, friends, spiritual well-being and community.

Most of us get our money through a job; I work hard, you work hard, and we get paid. Maybe I make products like steel and maybe you provide services like health care.
Without a job, however, people like us have no access to income, let alone wealth production.

Right now in Gary we face a 40% unemployment rate. That’s thousands of people who cannot find a job; many have never been able to enter the labor market. What we need to guarantee the future of Gary are jobs, not just an infusion of outside capital. Not that I am opposed to capital investment, as long as we can get a Community Benefits Agreement, something the Federation has been fighting for as long as I can remember.

Local efforts at economic development, however, have been focused on getting people with lots of money to invest in Gary on big projects: for example, a ball park, an airport expansion and a remodeled Marquette Park. Those folks invested in order to make more money for themselves, not to create community wealth. The important question is: How many long-term or even short-term jobs went to people in Gary? The answer: Very few.

This morning, I want to compare two different approaches to creating wealth: one that works in the interests of the community primarily and one for those who want to make more money. Again, let me be clear: I am not against outside investment, if it benefits the people and adds to shared community wealth.

The kind of obscene “wealth” we see in today’s world does not come through hard work; it comes through gambling, using money to make money. Bankers, investors, loan sharks, hedge fund managers make money not by producing goods and services but through financial transactions that create winners and losers.

Corporations send jobs overseas to be “winners.” And who have been the big losers? Workers. Without a job & income, how can we participate in our communities, buy or improve our homes and our schools, contribute to general health and welfare? We need to find paths for sustainable community development.

First: the “money makes money” approach! The Mayor’s Office and the Gary Redevelopment Commission point to the MaiaCo Corporation and contract as the great hope for Gary. It is a clear example of how money begets money. This corporation is being given extensive lands in Gary, to determine how and what to develop, and then to hire contractors to do the work. MaiaCo invests some initial time and money, but gets 100% of it back right off the top. The City turns over the land, after tearing down the buildings with our tax monies.

Neither MaiaCo nor its contractors are required to hire locally, and neither the Gary Redevelopment Commission nor MaiaCo has any responsibility to monitor hiring practices! The contract holds them to “encouraging” local hiring. As a result, wages and salaries will leave the city at the end of each day. Then 65% of all proceeds go to MaiaCo. Gary will get 35%. To me Gary is giving away more community wealth than it is creating.

Of course the work MaiaCo does will increase land values in Gary, so that the haves will be better off, but what about the have-nots? They will be forced out of the city—just as it happened in Chicago, when Mayor Richard Daley did his redevelopment of the housing projects and Bronzeville. More than 65,000 African-Americans were forced to leave the City.

Now let’s consider a different model, the Cleveland Model, for example. Like Gary, Cleveland is a devastated Midwest urban center, wracked by job loss, population loss and industrial flight. Their approach is based on environmental and economic sustainability, supporting the development of cooperatives. The Evergreen Cooperatives, as they are known, have to date three very successful business cooperatives: a green laundry coop, a solar-panel installation coop and an organic lettuce coop.

Cleveland is a hospital center, so there is a whole lot of dirty laundry that was creating a whole lot of toxic waste. Now the Coop does green laundering; the hospitals use them and the City is safer and residents get the jobs and money. One of the founders, Ted Howard, described the real benefits of this model:

“The way to think about Evergreen is not as a job creation or a cooperative strategy, but as really an exercise in community building and strengthening democratic life at the ground level where people live. It’s also an attempt to stabilize a community that has been radically disinvested over the last 20 to 30 years by globalization and capital mobility and jobs offshoring.”

Could be Gary, no?

The cooperative model that many have turned to is Mondragon in Spain, one of the oldest and certainly the largest cooperative networks in the world: it has 120 high-tech, industrial, service, construction and financial businesses run as cooperatives, including a bank or credit union, interlinked businesses, that employ over 100,000 workers—all owners—with annual revenues over $20 billion. Not bad. They even have Mondragon University where they teach the principles of cooperative production.

Cleveland’s 3 coops were built in one of the city’s poorest neighborhoods, largely African-American with a 40% unemployment rate. Again, sounds like Gary!
Strategically they built their coops based on real demand and the need for environmentally safe production and consumption: Laundry for the hospitals; solar panels for homes and organic lettuce for more exclusive retailers. The hospitals and universities put in start-up money, and now the coops are profitable and self-sustaining. No one was pushed out of their homes. The black community was developed and not displaced.

If MaiaCo goes forward without oversight and accountability, the poorest in Gary will be forced out of their homes, and the development will serve a new gentrified community.

Another U.S.-based model is Cooperation Jackson in Jackson MS. Many of your families left MS. during the Great Migration for a job in industry. Now we look to MS for a model for sustainable development.

In their words, “COOPERATION JACKSON IS AN EMERGING VEHICLE FOR SUSTAINABLE COMMUNITY DEVELOPMENT, ECONOMIC DEMOCRACY AND COMMUNITY OWNERSHIP.”

They are working on three interconnected cooperative initiatives: a federation of local business cooperatives, a cooperative education and training center (The Lumumba Center for Economic Democracy and Development) and a cooperative bank. No red-lining with this bank!!

Cooperation Jackson has three businesses in the works: Freedom Farms, Nubia’s Café and Catering Cooperative and a recycling and composting cooperative. You can imagine how one supports the other!

Cooperation Jackson points to the values that sustain their work:

  • The values of self-help, self-responsibility, democracy, equality, equity and solidarity.
  • In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

When you create a network of cooperatives and urban policies that support them, you get a SOLIDARITY ECONOMY. This solidarity economy is growing up all over Latin America and Europe. A Solidarity Economy is the scaffolding for real democratic participation, and real sustainable development.

  • Cooperative Principles include the following
  • Voluntary and Open Membership
  • Democratic Member Control
  • Sovereignty of Labor
  • Autonomy and Independence
  • Instrumental and Subordinated Character of Capital
  • Members’ Economic Participation
  • Self-Management
  • Pay Solidarity
  • Internal Cooperation – Cooperation within the Federation of Cooperative Jackson
  • External Cooperation – Cooperation among Cooperatives
  • Education, Training and Information
  • Social Transformation

Here’s a working definition of a cooperative: It is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

Gary actually has a long history of African-American cooperatives, beginning in the Great Depression. There were consumer cooperatives, farm cooperatives, and even cooperative banks. Do we have the building blocks for cooperative development? Most certainly. Consider this:

Every church, mosque or temple has many great contributing chefs, women usually who cook and donate. If we were to bring 10 of these women together, they could cook up a storm. If they understood a little bit about in-sourcing cheaper raw materials and marketing what they produce, they could gain income as a catering coop. That doesn’t happen overnight; it takes some organization, education and training. But it brings income and builds community!

So let’s do a “what if”: do we have in Gary a dozen workers who can fix cars, [stop after each] who can do home repairs, who can cook, sew garments, landscape, clean, build furniture, etc. The advantage of coops and a Solidarity Economy is that a group can do more, deal with ups and downs better, buy cheaper and sell cheaper and rebuild our communities.

Can a coop compete with a capitalist corporation? Quite a few have succeeded although most are locally-based. They organize and work locally and become an economic network that helps sustain communities on the local level. But there must be more than one, there has to be cooperation among them and city policies have to favor local producers over outsiders.

I end where I began: Community wealth produced by community members remains in the community!! Cooperatives are a viable alternative to gentrification or development as displacement. Cooperatives build sustainable communities.

Ruth Needleman
Professor Emerita
NWI Federation of Interfaith Organizations

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