ourEconomy: Opinion

How can we build a British economy that is democratic by design after COVID-19?

The solutions for building a more democratic, inclusive and community-based economic system already exist. Now is the time to advance them into the mainstream.

Sarah McKinley
6 October 2020, 8.40am
David Davies/PA Wire/PA Images

With calls to “build back better” and numerous reports indicating that the majority of Britons do not want a return to the “old normal,” the COVID-19 crisis offers us the opportunity to break from an unsustainable present and unjust past towards a reparative future anchored in a purposeful, inclusive economy that serves the wellbeing of all.

Sadly, we are already seeing an attempted reversion to the status quo ante – prematurely moving to “rescue the economy” at the expense of public health, with bailouts for finance and the corporate sector and precious little for the rest of us. We can already see the austerity narrative creeping back into view and there is a genuine threat that the present crisis will bring a doubling-down of punitive welfare measures and cuts to the public sector. The result will be an economy with all the injustices, contradictions, and crises we had before, though even more ingrained, uneven and unstable.

But it doesn’t have to go this way. The present crisis could well be our last best opportunity to change course and to build a more local, generative, social and democratic economic system. The COVID-19 pandemic could become a moment of crystallisation, with citizens and governments working together to build a new social contract and a genuinely inclusive economy. This could be prefigured and sustained by the extraordinary rise of social solidarity and support for key workers generated by the pandemic, which could then snowball into a movement for deep and lasting political-economic change.

We must do everything we can to bring about this change for good. COVID-19 is likely to be only the first of many shocks to come in this era of compounding crises, in which the kinds of economic responses we have seen in the past will only further exacerbate economic inequality and imbalances. The good news is that solutions already exist. But we must work to ensure that the response to the crisis ushers in a new era of Community Wealth Building as the basis of new local economic transformation plans to create the kinds of democratic, inclusive and community-based economies we need – economies truly centred on collective wellbeing, local resilience, ecological sustainability and economic justice.

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COVID-19 is likely to be only the first of many shocks to come in this era of compounding crises

Community Wealth Building (CWB) is a novel approach to community economic development that works to produce broadly-shared economic prosperity, racial equity, and ecological sustainability through the reconfiguration of institutions and local economies on the basis of greater democratic ownership, participation, and control. In place of an extractive and unequal status quo, it promises to build a very different economic future: one that is inclusive and equitable by design. It stands in opposition to the prevailing model of economic development that puts the accumulation of private wealth and profit above meeting the needs of people, entrenching and exacerbating racial, gender, economic, and geographic disparities.

Community Wealth Building is not simply about correcting some of the worst historical and contemporary injustices of corporate capitalism, or about making marginal improvements in the economic health of a few isolated communities. Instead, it is about moving in the direction of an entirely different political-economic system, linking new bottom-up forms of development with economic and political interventions at a variety of scales. Community Wealth Building is where economic system change begins, building towards the deep democratisation of the economy, society, and, ultimately the state.

And it is already making change in communities across the UK. In the last five years, there has been a steady uptake of the Community Wealth Building approach by a growing array of local councils, politicians, entrepreneurs and activists, and anchor institutions across the UK—and even including Registered Social Landlords, further education colleges, and within individual health institutions as part of the National Health Service’s long-term strategic plan. The actors who have been moving these promising models and experiments to new levels of sophistication and impact can be found far and wide in dozens of localities: in the most recognized example in Preston, but also in the Wirral; Newham, Islington, and Hackney; Birmingham; North Ayrshire; North of the Tyne; Bristol and elsewhere.

But while these laudable experiments are having real impact in their communities and demonstrating the true possibility for change on the ground, they are unevenly distributed and often disconnected and cannot yet scale to meet the demands of the challenges we face.

Community Wealth Building must now move from the fringes of local experimentation to become the new accepted norm for local economic development, recovery and transformation. In this context, Community Wealth Building must be understood as a fully integrated approach to transforming local economies from the ground up. It must realise its potential to develop institutions and build a new ecosystem rooted in participation and ownership by the community that will ensure a power base for long-term sustainability. To do so the movement needs to be properly resourced and supported, both in terms of local capacity building and policy development at all levels, to scale to the challenges and to fulfil its promise of transformative local system change.

Community Wealth Building must now move from the fringes of local experimentation to become the new accepted norm for local economic development

A new report from Common Wealth and The Democracy Collaborative, produced with support from Power to Change and developed with input from key actors in the field like the Centre for Local Economic Strategies, explores the existing Community Wealth Building landscape in the UK, its challenges and opportunities, and presents recommendations for filling the gaps in order to position this movement for a more democratic economy as the recovery response to Covid-19.

In addition to a groundswell of strategies from the bottom up to support practitioners and promote plural forms of enterprise ownership in community through resource, capacity, and network development, building this democratic economy will require a combination of policy actions from the top-down. Community Wealth Building is traditionally concerned with the former. Yet structural interventions that advance the democratization of the state and reimagine economic relations at all levels is essential to create the ecosystem for the flourishing of a democratic economy and true change.

Seizing on the awakening to the vital importance of community and the precedence of the everyday place-based economy in our daily lives in the COVID era, we must immediately support practitioners in community with the resources needed to build and grow capacity and skills from developing and circulating action-oriented tools and materials, making accessible training modules and professional development, and providing easy access to patient capital and long term financing. We must also reimagine and scale models of community-rooted enterprise and develop and popularise a multi-pronged strategy to spread and democratise community business at scale. At the same time, rather than bailing out corporations and creating money to prop up financial markets, we should be taking advantage of the newly emboldened state to create a holding company to save local enterprises and prevent the possibility of an “Amazon recovery,” to develop a national investment bank to provide financing to public and private bodies across the UK in service to the social good, and to support the delivery of local Green New Deals through Community Wealth Building strategies such as public-commons partnerships and municipal bonds for a just transition.

The COVID-19 crisis has laid bare the failures of our current system and positioned us on the precipice of change. We must resist at all costs a doubling down on the current system that was already pushing beyond ecological limits and characterised by wealth extraction, inequality, poverty and precariousness. From the dogged hard work of activists, innovators, entrepreneurs, local leaders, and organisations on the ground, Community Wealth Building and the movement to advance a democratic economy has been an effective response to the ills of our system.

Now is the time for it to step fully into its transformative potential – to become the accepted means by which we transform our local economies and build a new political economic system from the ground up that serves all people and the planet.

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