By Marjorie Kelly and Ted Howard
Our economy is designed by the 1 percent, for the 1 percent. The Making of a Democratic Economy offers a compelling vision of an equitable, ecologically sustainable alternative that meets the essential needs of all people.
We live in a world where twenty-six billionaires own as much wealth as half the planet's population. The extractive economy we live with now enables the financial elite to squeeze out maximum gain for themselves, heedless of damage to people or planet. But Marjorie Kelly and Ted Howard show that there is a new economy emerging focused on helping everyone thrive while respecting planetary boundaries.
At a time when competing political visions are at stake the world over, this book urges a move beyond tinkering at the margins to address the systemic crisis of our economy. Kelly and Howard outline seven principles of what they call a Democratic Economy:
- place (keeping wealth local),
- good work (putting labor before capital),
- democratized ownership,
- ethical finance, and
Each principle is paired with a place putting it into practice: Pine Ridge, Preston, Portland, Cleveland, and more.
The Making of a Democratic Economy tells stories not just of activists and grassroots leaders but of the unexpected accomplices of the Democratic Economy. Seeds of a future beyond corporate capitalism and state socialism are being planted in hospital procurement departments, pension fund offices, and even company boardrooms.
The road to a system grounded in community, democracy, and justice remains uncertain. Kelly and Howard help us understand we make this road as we walk it by taking a first step together beyond isolation and despair.
Eillie Anzilotti on FastCompany wrote:
"In little more than 100 pages, Marjorie Kelly and Ted Howard provide an excellent introduction to the theory and practice of democratising economic life. [...] First, a definition of what we are aiming for: ‘A democratic economy isn’t a top-down command economy. It isn’t capitalism plus more regulations and social safety nets, nor is it capitalism plus green technologies. Building a democratic economy is about redesigning basic institutions and activities — companies, investments, economic development, employment, purchasing, banking, resource use — so that the core functioning of the economy is designed to serve the common good.’ The opposite of a democratic economy is what the authors call an ‘extractive economy.’ A key feature of extractive economies is that they exhibit ‘capital bias.’ That is to say, the rights of capital are privileged over the rights of labour and of the natural world. [...] Making employees owners is one of the authors’ favourite ideas for overturning the extractive economy: several of the case studies presented in the book feature employee-owned businesses. [...] The process by which these alternatives become the norm will be both bottom-up and top-down. Kelly and Howard write admiringly about the model of ‘community wealth-building’ being pioneered in places like Cleveland, Ohio, and Preston, in the northwest of England. [...] Clearly, this is a model that can be replicated elsewhere. But, to achieve scale at speed, local pioneers could do with a helping hand from central governments. [...] And, if central governments fail to step up, perhaps central banks will. One of the more intriguing ideas explored in The Making of a Democratic Economy is that of using quantitative easing (QE) to buy out oil companies and wind them down."
"The Democracy Collaborative is a national research institute dedicated to developing new strategies for a fairer economy, and in the book, Howard and Kelly cite specific examples of projects they’ve encountered that are fostering sustainability and creating local wealth. 'We wanted to show how these projects really add up to a new paradigm,' Kelly says. 'There’s so much work happening—there might be a worker cooperative in one place, or an impact investment in another—and it’s often hard to see how they all knit together. But it’s really about values.' [...] The projects in The Making of a Democratic Economy, Kelly and Howard note, all have the potential to scale and spark replicas across the country or even the world. In collecting them all in this book, the authors hope to convey that as individually or circumstantially motivated as they may be, they all represent a shift away from a mainstream economy that’s no longer working for the majority of people, and the potential to design thoughtful alternatives."
- "To make the economy more fair, we need to make it more democratic" article about Kelly's ideas by FastCompany, 29 Octcober 2019
- "Redesigning Business for a Democratic Economy" - article by Marjorie Kelly on Porchlight Books, 17 July 2019
- "Trickle-up economics; How Cleveland, Ohio, and Preston, Lancashire, are bringing it all back home" - article by Ted Howard on Prospect Magazine, 13 July 2019
Table of Contents of The Making of a Democratic Economy
- Introduction: From Cleveland to Preston
(A new paradigm for economic transformation)
- An Economy of, by and for the People: The Great Wave Rising Worldwide
(Principles of a democratic vs. extractive state)
- The Principle of Community: Creating Opportunity for Those Long Excluded
(Incubating equity in Portland economic development)
- The Principle of Place:Building Community Wealth that Stays Local
(The $13 billion anchor mission in Cleveland)
- The Principle of Good Work: Putting Labor before Capital
(The worker-centered economy of Cooperative Home Care Associates)
- The Principle of Democratic Ownership: Creating Enterprise Designs for a New Era
(The employee-owned benefit corporation, EA Engineering)
- The Principle of Sustainability: Protecting the Ecosystem as the Foundation of Life
(The Federal Reserve's power to finance ecological transformation)
- The Principe of Ethical Finance: Investing and Lending for People and Place
(Banks and pension funds invest for local wealth in Preston, England)
- Conclusion: From an Extractive to a Democratic Economy
(Thoughts on next steps for the path ahead)
About Marjorie Kelly and Ted Howard
Marjorie Kelly is the Senior Fellow and Executive Vice President of The Democracy Collaborative (TDC) a non-profit research organization founded in 2000. TDC is a research and development lab for a democratic economy. Kelly is cofounder of Fifty by Fifty, a network initiative to catalyze 50 million employee owners by 2050, for which she has led research on “Next Generation Enterprise Design”. For her research on the role of capital in taking employee ownership to scale, she was named the Robert J. Beyster Research Fellow by Rutgers University. Previously Kelly was a Fellow at the Tellus Institute, a 40-year old nonprofit research organization based in Boston, where she co-founded Corporation 20/20, a multi-stakeholder initiative to envision and advocate enterprise and financial designs that integrate social, environmental, and financial aims. She was co-founder and for 20 years president of Business Ethicsmagazine, known for its annual ranking of the 100 Best Corporate Citizens and Social Investing Awards.
Ted Howard (born 1950, Ohio) is a social entrepreneur and author. He is the founder and Executive Director of The Democracy Collaborative and served as the Minter Senior Fellow for Social Justice with the Cleveland Foundation from 2010-2014. For more than 30 years, Howard has worked for non-profit organizations including UN agencies and The Hunger Project. Since 2001, Howard has served as chairman of the board of Search for Common Ground, a conflict resolution NGO. He is chairman of the board of ocean advocacy group Blue Frontier Campaign, and a board member of LIFT, a national anti-poverty organization. In the early 1970s, he co-directed The People's Bicentennial Commission with Jeremy Rifkin, and in 1977 the pair co-founded the Foundation of Economic Trends.