Part IV: How we convince the wealthy that shared prosperity is even possible
This is the fourth part of an essay written for the Institute for the Future’s Equitable Enterprise Initiative.
Most economists still have trouble understanding a concept as simple as distributism, primarily because they still believe in the “Jack Welch” mythology of growth and abstraction as the only path to profit. That’s just a wrong story, and it doesn’t mean we should give up trying to teach a better one. Anyone who understands basic arithmetic can eventually be made to see how circulating money can lead to mutual prosperity.
For just one simple example, consider the US Steelworkers Union. Instead of investing their retirement savings in random stock funds, they chose to invest in construction projects that hired steelworkers! So they earned ownership of buildings while also paying themselves back their own money in salary. After this success, they got the even brighter idea of investing in construction projects that provided retirement housing for their parents and their own retiring members. When I describe such circular investment strategies to most audiences of bankers and economists, they react as if these are illegal schemes. But this double and triple dipping is not a conflict of interests at all.
Only with bounded investments and communities — such as the African-American cooperative communities described by Jessica Gordon-Nembard in her marvelous book Collective Courage — can people generate what we might call the “cyclone” effect required to support a sustainable velocity of money. While African-American communities achieved bounded economics through necessity — they were not allowed to participate in the greater economy — we can now use bounded economics as a strategic choice. In short, it’s better to earn one dollar ten times, than ten dollars just once.
The rightmost column on the chart is most like the first column — except it achieves its goals consciously. We reinstate the commons because we understand the alternatives. We retrieve the artisanal economy in a digital environment not because it’s old-fashioned, but because we finally have the ability to network these businesses and distribute their products.