The traditional model for development has generally reflected the values of economically advantaged groups. Regardless of our own particular desires, development has occurred as a reflection of the rich upon the poor. Our vision challenges this model.40 Current conditions make the necessary space for a fundamental shift of the development paradigm toward a model that sets the economic and social needs of the whole society, particularly its most oppressed, as the target of development. In this model, the costs and role of labor, democratic management, corporate obligations to the community, and environmentally productive technology are not seen as restraints on development but as dynamic benefits that can drive and develop our productive capacity.
The idea of empowering a community to wage its own fight against poverty and urban decay is not new. For the last 30 years, thousands of organizations supported by billions of dollars in private and public funds have been involved in community development work, and many dedicated practitioners sought to achieve that goal with enormous creativity.
Community development strategies used to unfold within the framework of a relatively stable and expanding economy. Activists could launch campaigns expecting at least some of the fruits of growth to be available for development work, without necessarily challenging society's basic structure. Campaigns demanding to redistribute wealth, produced results. That is often no longer the case.
In the last ten years, a small but significant number of organizations are experimenting with new approaches and new relationships.
These organizations and many others like them represent a leadership infrastructure and resource network that is committed to community development and provids important assistance in a range community economic development activities. In many cases, these organizations have already developed innovative models and projects in line with the strategic direction advanced in this paper.
However, the majority of development organizations hold on to traditional assumptions that had more merit under the previous social contract. In today's environment they are transparently ineffective in truly representing the interests of poor communities. In many cases these community development corporations have become little more than a form of traditional trade association, providing low-cost services to local businesses--possible because of the not-for-profit status they receive from the government.
In some cases, development corporations have become active participants in development strategies that are gentrifying urban neighborhoods. This has accelerated displacement of residents who have no hope of the income needed to benefit from the "commercial revitalization" of their community, and has accelerated the loss of manufacturing jobs and companies. Owners of companies, however, are offered enormous sums for their sites by developers, which allows them to cash out on the value, and they have the money to relocate--frequently out of the city. They make a handsome profit to boot.
During the Vietnam Era, we were stunned when a general announced that he had to "destroy the village in order to save it." Some in the field of community development are now "destroying the community so they can develop it."
Overall, these development organizations have lowered their sights to marginal types of business activities ignoring what really drives the health or decline of a community. They are passive in their supply of services not entrepreneurial in the recognition, defense, and development of the human and material assets of the community. They are seeking "jobs" for the community without distinguishing the jobs that develop the community and the individual from jobs that break them down. After all, slavery once was full employment for the African-American community. Our concern must be with the quality of jobs, and we must recognize that a job does not necessarily represent progress. Dialectics teaches us that every job has some positive qualities as well as some negative ones but from a community standpoint, we must seek jobs whose positives outweigh their negatives.
These traditional community development organizations are not well positioned socially or politically to respond to the crises and opportunities in our communities. They have been unable to advocate policy options that challenge established boundaries of business ownership and control, or of public accountability. They are often unable to promote government intervention in the affairs of local businesses and lack the resources necessary to mobilize the community behind a comprehensive development policy.
We begin with the premise that poverty is firmly linked to the disinvestment and deindustrialization occurring in our communities. Development therefore depends upon a willingness to use every resource at our disposal to reclaim and improve a community's productive base. First, we must retain what exists, preserving these assets as a foundation for future development.
Our second premise is that the business sector as a whole is not an adequate sole source of information about community assets. Other sources must provide further information to guide our actions, whatever they are. After all, no serious member of the investment community relies on one source of information. We must have timely and accurate information about all the assets of our community as a foundation for any action that we take.
The New York Industrial Retention Network
In New York City, a network of local development corporations including the Brooklyn Economic Development Corporation, the East Williamsburg Valley Industrial Development Corporation, the Fifth Avenue Committee, and the Pratt Institute Center for Community and Environmental Development joined the Central Labor Council, local businesses, community-based organizations, and local and state governments to form the New York Industrial Retention Network (NYIRN). This network was a product of a pilot project in Brooklyn initiated by CLCR and Locker Associates.41 It gathers public data on local companies from the press, from databases, and information published by the companies themselves. It combines this with other information from employees, customers, residents, accountants, and suppliers and distributers of local companies.
With this public and private data, NYIRN makes an analysis of companies at risk or in need of assistance (including those considering relocation because of growth). It puts into motion a range of resources that can solve the kinds of problems that have cost this metropolitan area so many valuable industrial jobs over the last 20 years. The diversity of this network, combined with the competency and commitment of its board and staff, make it an effective initiator of community development activity.
A major component and opportunity of an industrial retention program revolves around ownership. Technical and financial assistance, public intervention, and appropriate public policy can solve a number of problems if targeted and delivered effectively. Labor's expanded use of employee ownership has established local, popular control of a significant number of companies in the last 15 years. With many companies, particularly small ones, the need is only to find new qualified owners, often available in the local community but overlooked by the traditional market.
Who owns the company and what values and priorities guide their business plan? This is the critical determinant of how production is organized, the link between the company and other companies or the community; its patterns of employment and training, and the level of commitment to affirmative action and environmental standards. Learning who owns a company is one of the most important opportunities for those concerned with economic development on a community level.
We must be prepared to have people with our values and priorities purchase and develop local industries. This can be accomplished in a number of ways: employee ownership, community shares in local companies plus positions on the Board of Directors, and ownership by local entrepreneurs directly linked to community initiatives and organizations. In these ways, we can most directly promote development with new standards and objectives consistent with community needs.
To mobilize the grassroots support necessary to our vision, the relationship of an enterprise to the community must change in three fundamental ways. First, we must democratize the workplace itself. This involves seeking non-discrimination and affirmative action, greater control by working people over safety and other conditions of work, and greater participation by employees in matters affecting their lives, which have traditionally been reserved exclusively for management. Second, we must democratize relations among enterprises of the community. This requires facilitating their cooperation with and support for each other, and their common support for the community as a whole. Third, we must democratize the relationship of the enterprise to the community by finding ways for the community to evaluate and monitor a business's contribution to its overall economic, social and cultural growth. In these ways, we begin to socialize and democratize the use of the market.
This focus, guided by an appreciation of the power of manufacturing to development, can create a foundation for other forms of commercial and retail development. If necessary, legal tools like eminent domain must be exploited to facilitate the acquisition of factories which might otherwise be dismantled. We refuse to treat any community as expendable and are confident that many businesses could operate more profitably if the community were mobilized in their support.
In order for this to happen there must be a basis for that support. This is possible when our vision of development:
But if communities are to be mobilized in support of such projects, commercial viability, while a necessary condition of success, is not sufficient. Typically, a community's resources and objectives are seen through the wrong end of a telescope -- everything is diminished and narrowed. We cannot hope to mobilize a community to serve only the short-term self-interest of an individual entrepreneur. Instead, a long-term and comprehensive analysis of the health and well being of a community must guide its support.
What we envision is not a narrow application of cost accounting categories to evaluate success, but decisions that are based on a "Social Cost/benefit Analysis." This method recognizes the full costs to a community of such things as homelessness, limited education, malnutrition, alcoholism, health problems, crime, and environmental degradation. We must also see the cost-benefits of job training, education, cultural development, and heightened community organization and sociability.
In order to accomplish these objectives, persons and resources habitually left out of the traditional development community must be mobilized. Labor, organized and unorganized, is the major element of our productive capacity. Organized labor is an essential agent of economic and social change. The decline of union membership has made unions more open to work with new partners. Labor must be challenged to organize in poor and distressed communities much more imaginatively than it ever has, and to organize around community development as well as traditional labor issues. Rebuilding and expanding the labor/community coalition is fundamental to the success of this strategic vision.
Our strategy requires four organizational components:
The Enterprise Development Company (EDC)
The enterprise development company (or a similar capacity within other organizational structures) is established to provide the full range of services and expertise needed to acquire, manage and develop businesses consistent with the social and economic goals of a broader coalition. Such expertise is not found under rocks, but can be developed from within our midst.
If the EDC is a for-profit company, then it can be owned by a not-for-profit company to insure the recycling of its surplus into other aspects of community development. The EDC can function as a clearinghouse for information about local businesses gathered from a broad early-warning network of sources, including churches, community organizations, development corporations, city government, labor unions, and residents. It may be run by or work closely with unions and churches themselves.
The EDC will assist a company in developing financial resources through contacts with individuals, venture funds, banks and grant sources, and will also provide technical services such as accounting, legal, marketing, and management assistance. In all its activities, the EDC seeks to establish a long- term position of influence or control over the company, formal or informal, in order to monitor performance and assure achievement of community goals. Thus an EDC might have representation on the Board of Directors of a local enterprise or own the company outright.
Many community development corporations either provide these services now or are positioned to provide them. Chicago Focus, Inc., a subsidiary of the Center for Labor & Community Research, is an example of an EDC. It is a for-profit full-service merger and acquisition company wholly owned by a non-profit organization devoted to community economic development. Chicago Focus gets leads on acquisition opportunities through CLCR, unions, local government, and the development community, and has developed a pool of minority and other entrepreneurs interested in buying manufacturing companies and who are committed to keeping jobs in Chicago.
Cooperative Home Care Associates
The Cooperative Home Care Associates (CHCA) is another such company in the home health care field. CHCA established a successful cooperative home health care company in the Bronx, NY employing over 300 workers. The CHCA model has influenced industry standards and increasingly influences the character of the industry in New York. They have now established similar companies in other cities.
Steel Valley Authority
The Steel Valley Authority (SVA) in the Pittsburgh area is a similar structure. It was created in 1989 by the Tri-State Conference on Steel--a religion/community/labor industrial-retention coalition. The SVA maintains an active multi-county early warning network, has been granted the power of eminent domain, has been active in several employee buyouts in the region, and has provided technical assistance to local companies. The SVA and the USWA are creating the Industral Valleys Investment Fund for the Pittsburgh area and established the Heartland Project to explore the creation of a fund to service a broader multi-state region and finance employee acquisition, restructuring, and the turn around of manufacturing companies.
The Linked Enterprise Network
Our concept of the linked enterprise network has taken inspiration from the Mondragon network of industrial cooperatives in the Basque region of Spain, flexible manufacturing districts in Northern Italy, and various U.S. efforts at organizing for community control. Even in an informal network, facilitating contacts among community enterprises can encourage local business to stay in the area, foster common purchasing and marketing arrangements, promote training and educational programs, provide sites for employment training of residents, and establish links between enterprises and other community organizations. At its most ambitious, the network seeks to tie these companies together formally to pool capital and resources for development and collectively to create educational, cultural, and research institutions that are collectively capable of providing greater economic strength and leadership.
Garment Industry Development Corporation
The last 15 years have seen creation of a number of relatively successful networks. One of the first was the Garment Industry Development Corporation (GIDC). Initiated by the International Ladies Garment Workers Union in partnership with New York City government and the garment companies, GIDC was organized first in response to an industry crisis about maintaining its location in Chinatown. The program has evolved to include assistance to companies on training, technology, marketing, and export. Still centered in New York City, GIDC has provided inspiration and assistance to other efforts around the country.
Appalachian Center for Economic Networks
The Appalachian Center for Economic Networks (ACEnet) in Athens Ohio is implementing an "asset-based strategy" in linking together 40 small companies in the specialty food industry in their Kitchen Incubator. In this center, they provide large ovens, stoves, freezers, and work tables so small companies can respond to growing demand. But more important, they provide information on international markets and resources for their companies. They share information and expertise on product development and marketing. They have established a Product Development Fund that will financially support these companies in the early stages of taking a new idea to the market. These activities are part of a vision of sustainable economy in a rural region, and its working.
Candy Institute
In Chicago, the Candy Institute emerged from the caldron of the campaign to save jobs at Brach Candy Company. It is developing programs on bench marking, joint purchasing, combined production facilities, effective linkages to Chicago's educational community, and marketing.42
The Umbrella Community Organization
An umbrella community organization is needed to ensure supervision of planning and development by the community as a whole. Development objectives should be established by the umbrella organization, and criteria for success must reflect the community's political vision as well as its inventory of its own and adjacent physical and human resources.
Key to this strategic concept is the objective of community control of the economy. This is not something that can be declared or mandated in the abstract. No adequately established formula gives detailed direction to a local project. It is instead a process that brings more and more people into economic decisionmaking by:
The ability to control is earned, not declared. At the beginnings of these projects, the level of control will probably be minuscule. Effective projects will extend and expand this control systematically over a period of years. Generally, we would expect slow initial progress with ebbs and flows thereafter. But current conditions permit dramatic growth of these efforts, and leadership must be prepared for that possibility.
In the same spirit, democracy is created through a process. A project cannot simply declare that it is acting on "behalf of the community." Joint action grows through leadership noting specific opportunities for development in the community, and bringing in broader and broader circles of people to participate. It requires building bridges between labor and local residents, between labor and management, between community and local business groups, between religious institutions and community groups, etc. It must be a forum for training broad, indigenous leadership that can sustain community development work beyond the tenure of any particular leader or organization. Our commitment is to continually extend and strengthen democracy within our own structures as we fight for more democracy in the broader community and within the society as a whole.
There is no formula for how such an organization can be built. Examples, however, exist. Many community organizations, networks, and coalitions that are providing these services and leadership, or could easily adopt this approach.
The Naugatuck Valley Project
The Naugatuck Valley Project (NVP) in western Connecticut, a member group of the InterValley Project, is in many respects characteristic of the kind of coalition we propose. The NVP is a regional organization of more than 50 religious, labor, community, and small business groups drawn together by the dramatic deindustrialization of what was once the center of the American brass industry. Factories that had been locally owned were sold to multinational conglomerates that, in disinvesting in the region, gave little thought to the valley's economic survival. Local communities felt helpless in the face of industrial collapse.
Organizers for the NVP, however, drew on the experience of community organizing and used those lessons to mobilize around industrial retention and job growth. They worked with local trade unions to recognize the early warning signs of plant closings, forced bargaining with corporate employers, arranged an employee buyout, with the help of The ICA Group, drafted legislation unanimously adopted by the legislature to permit money from a state trust fund to be made available for loans for worker buyouts, and developed a land trust for cooperative housing. According to one sympathetic report, "with chapters in six towns, hundreds of active supporters, and meetings almost daily in one or another part of the valley, the project has become a vital force in the life of the region."
Sustainable Milwaukee
Over the last five years, Sustainable Milwaukee (SM) has pulled together 80 to 90 local organizations to provide an overall framework for sustainable development, and to lead projects that apply those principles on the ground. SM has provided support for the Milwaukee Regional Training Partnership, a consortium of 35 metal working companies and their unions committed to establishing common standards for job training and common programs.
The New Chicago Campaign
Some 20 community, public housing resident, business, environmental, policy, religious, and development organizations, including CLCR have created the New Chicago Campaign. They are developing a blueprint for a sustainable Chicago metropolitan economy. It is also exploring several community business projects including the start-up of companies in the remanufacturing sector. Recently it targeted the city's use of a technique called tax increment financing to promote gentrification of several neighborhoods which results in the displacement of low-income residents and industrial companies.
Community umbrella organizations insure, for example, that participating enterprises make a contribution to child care in order to facilitate the development of women's leadership and job skills. Environmental and other objectives of the community are monitored by the organization. It can also facilitate cooperation among residents so that common needs are met cooperatively. One way or another the organization seeks to ensure that programs of adult education, literacy, English language classes, high school equivalence programs, vocational training, computer training and the like are available.
The organization facilitates union organizing by developing contacts between unions and unorganized workers, as have the Asian Immigrant Women Advocates of the San Francisco Bay Area. Like that organization, it will concern itself with making medical, legal and other counseling services accessible to members of the community. Alternate forms of informal conflict resolution among neighbors might be found. Laundry and food co-ops and other cooperatives forms of meeting essential daily needs could be envisaged.
To lead, the umbrella organization must become a center for the eradication of drug and alcohol abuse. In poor communities the drug industry has become a center of entrepreneurial activity for youth and a symbol of material success. The umbrella community organization must fashion alternatives. It must also mobilize the community to deal with homelessness. Factories can be recovered as centers of cultural life and a sites for lectures and plays as well as for work. Salsedo Press, an employee-owned company in Chicago, opens its doors to the broader community for a Christmas Party and Cinco de Mayo/May Day celebration. But in addition the umbrella organization must link these actions with issues of economic development into a coherent, consistent program.
Winning Public and Governmental Support for the High Road
It's not enough just to work on the practical application of this vision at the company and community level. Comprehensive development policy agendas must address the conditions in specific cities, towns, and communities. That policy fight needs to be waged in all the sectors and institutions that help shape public opinion and are designed to serve the public.
The terrain for this work will often be on a local level at a particular company within a particular community. Such work must be seen as a step toward creating national industrial and economic policies that correspond to the needs of labor, community, and the broader public. We must take the lessons of these experiences and generalize them in ways that allow their convertibility to national legislation, policy, and programs.
At the same time, local work creates the constituency and leadership necessary for the passage and implementation of national policy. Implementing these strategies in a particular locale is a way of training the development movement. National objectives will only be achieved if there is a determined fight--plant by plant and community by community.
Finally, once these structures are armed with a new strategy for development and have experience in its application to many communities and companies, they must seek influence and control in the political and governmental realm. The market, as a source of resources for this work, typically has been underestimated. On the other hand, absolute limits to the market need to be recognized.
It is essential that we focus part of the organizing power of these strategies on the political process. We need to educate, train, and recruit leaders with political skills and ambition, and they must run for office, seeking the full resources of local, state, and federal government in support of these initiatives.
Our policy for government is for it to support and reward those on the High Road of development, and block and punish those on the Low Road of development. Our strategy calls for and depends on government competency and effectiveness. The unambiguous goal of government and politics must be that communities are the beneficiaries of development.
We support the use of government to reach our social and economic objectives, but are critical of the "command" approach to the economy and society, whether it comes from the socialist, social democratic, or liberal capitalist model. Strong government must lead and support stronger initiatives and capacity at the community, firm, family, and individual levels. Local and micro-level initiatives must be profoundly linked to the struggle for national policy and effective government.
We seek the greatest possible decentralization of responsibility and capacity as we build the national capacity to coordinate, promote and defend equality and fairness, and as we develop macro-policies that promote and extend our goals. Both government and politics must be linked to the details of building a sustainable economy as well as to issues of representation, justice, and international affairs.
In their deliberations, governmental and political leaders should recognize that macro-policies must be rooted in small-company efficiency within a democratic approach to management and a link to the immediate community.
Our strategic objectives need political expression on a local and national level. This can happen both within existing parties and in new formations. We work with all in the political community who support all or some of our objectives as circumstances and capacity permit. Clearly, the Republican and Democratic parties are institutionalized creations of the status quo. Their daily failures and scandals create more space for new approaches and new formations. Even they are concerned with the declining percentage of registered voters that they represent. Within these parties, as within business, individuals and caucuses are our tactical and strategic allies. We must always be looking for them and working with them when possible.
Many of the issues this strategy seeks to address, such as entrepreneurial leadership of the economy, cross over traditional ideological barriers. Many politically and socially conservative people completely understand and support our approach to competing within the market for the development and control of companies. They grasp what we are suggesting more, in fact, than political leaders from the left or the progressive social and political agenda, and then they often become open to seeing other issues in different ways as well. A number of the projects I have described have been supported by Republican administrations as well as Democratic ones.
One movement that suggested the power of this approach was the effort to elect and re-elect Harold Washington as Mayor of Chicago. He and many of his supporters were deeply committed to the objectives of this strategy, put resources into its development, and contended for leadership in the Democratic Party, despite the obstacles.
We now have several contending third parties such as the Labor Party, the Green Party, and the New Party. Programmatically, organizationally and culturally, however, they remain anchored in the old paradigm of development--usually limiting their objectives to new iterations of traditional demands. Within these parties, though, a large number of activists and leaders have contributed to the experience that shaped our vision of development and who are part of the effort to articulate and apply a new strategic approach. We should persist in reaching out to them in creating a common platform and plan of action.
These are periods of change in community. In the context of widespread decay, decline, and human loss in urban and rural areas, traditional approaches to development and politics are proving to be inadequate. There is a new willingness--and sometimes passion--to look at new approaches and new strategies.