July 06, 2012
A Guide to Economics for the 99%
by Robert Kropp
The Center for Popular Economics publishes Economics for the 99%, a handbook which describes the
roots of economic inequality and offers a solidarity economy as an alternative.
Neoliberal capitalism has driven the economic policy of the United States for more than three
decades. Its mix of drastic deregulation of the financial sector, slashing of taxes for the very
rich and corporations, and attacks on social programs that benefit the poor and middle class, led
directly to the financial crisis of 2008; a crisis whose effects can still be measured in high
unemployment rates and often illegal bank foreclosures on the homes of millions of Americans.
To their credit, even before the crisis sustainable investors identified environmental
degradation and socioeconomic inequality as corporate practices that both hinder a systemic uptake
of sustainability and create risk in their investment portfolios. For years, they have been
chipping away at the fortress provided for corporations by American economic policy.
here we are, four years after the crisis, and not only have conditions worsened for many Americans;
conditions for the very rich and corporations—including the financial industry, whose reckless
gambling caused the crisis in the first place—have recovered and even improved, and as a result
inequality has grown even worse.
It doesn't require a degree in economics to recognize
that a sustainable and just society requires systemic changes to our economic system, but a little
knowledge does help demystify the current system and lead one to a consideration of alternatives.
To that end, the Center for Popular
Economics (CPE), a Massachusetts-based collective of economists, has published a booklet
Economics for the 99%.
Crediting the Occupy Wall Street movement with having "shifted
the conversation" on economic inequality, the booklet proceeds to describe the rise of neoliberal
capitalism that has occurred since the Reagan administration took office. Economic policy since
then has successfully dismantled a significant number of regulatory protections enacted as part of
Roosevelt's New Deal in the 1930s. As a result, the percentage of wealth held by the top one
percent is at least as high as it was in the late 1920s, while worker protections and social
programs have been eliminated or drastically enfeebled.
So what is to be done? The
Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by the US Senate in 2010, was
intended to regulate those aspects of the financial system that led to the crisis. However, as CPE
points out, the legislation "falls short of what is really needed in a number of ways." For one
thing, the "size and power" of so-called too big to fail banks "enabled them to influence
Dodd-Frank and to pose problems for the future implementation of the law."
On the other
hand, "The 99% have a huge opportunity to demand changes directed instead at solving their problems
and meeting their needs," CPE states. "If we don't act now, with neoliberal capitalism discredited
and change in the air, the 1% may impose on the rest of us something even worse than
The booklet continues with a description of an economic system, which if
enacted could meet the economic and social needs of the 99%. The solidarity economy, according to
the US Solidarity Economy Network (SEN), "is a new
way of naming and conceptualizing the many types of transformative economic values, practices, and
institutions that exist in the US and all over the world." It "constitutes an alternative economic
model to neoliberal capitalism, one which is grounded on solidarity and cooperation, rather than
the pursuit of narrow, individual self-interest, and that promotes economic democracy, alternative
models of local economic governance, equity and sustainability rather than the unfettered rule of
Another alternative raised by CPE is the replacement of capitalism with
socialism, which, the booklet argues, "will not regulate Wall Street. Socialism will end Wall
"Capitalism is run according to the plans of the few," the booklet states.
"Socialism will be run according to a plan voted by the many. And a planned economy would not have
recessions or depressions, which are the results of a system of production for profit."
The Occupy Movement has helped raise awareness that neoliberal capitalism is not a solution,
but a central part of the problem. Replacing neoliberal capitalism with either system may seem an
impossibly far-fetched notion for many. But as increasing numbers of concerned investors, civil
society organizations, and citizens know, the US and indeed the entire world remains on a
disastrously unsustainable path, doing little to address climate change and the concentration of
wealth in the hands of the few.
It seems time for serious consideration of sustainable