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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.

Yet 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 entitled 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 neoliberalism."

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 the market."

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 Street."

"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 alternatives.


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