Building an Economy for Life: The Great Ownership Transition

By Marjorie Kelly, Distinguished Senior Fellow, The Democracy Collaborative

How do we build an economy in the service of life? That’s the core question for the Wellbeing Economy Alliance and one that we at The Democracy Collaborative (TDC) also seek to answer. What’s the path to an economy that provides wellbeing for all? Our sense is that it’s an economy that’s been democratized – with wealth and power held broadly, with basic economic institutions and practices designed to allow us all to prosper on a flourishing Earth. 

I’ve worked for this kind of democratic economy for more than 30 years, alongside countless others. Collectively, we have advanced alternatives like public ownership, community and worker ownership, local investment, and mission-driven enterprises. 

But I’m discouraged. We’re losing ground faster than we’re gaining it.  

I’ve come to see that it’s not enough to build the positive. We also need to turn and delegitimize the extractive system. Delegitimizing starts with naming the system’s core dysfunction. I call it “wealth supremacy,” the bias that institutionalizes infinite extraction of wealth for the wealthy, even as it means stagnation or losses for the rest of us. In my new book, Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises, I explore how our culture valorizes the wealthy, and I unpack how the system is designed to maximize their wealth at the expense of everyone else. The foundational myth is that no amount of wealth is ever enough. Damage to ecosystems or those who are not “wealth owners” is of no concern.

What’s at work is an extractive property regime, designed to deliver maximum gains to capital (another word for wealth). As French economist Thomas Piketty says, every society has a political regime and a property regime. Note he doesn’t say economic regime, but property regime. Ownership is the base of economic power. In agrarian societies, land was the source of wealth and power. During industrialization, factory and railroad owners became the Robber Barons, possessing a new form of property: capital. 

Today, ownership is about financial assets. Financial assets in the 1950s in the US were about the same size as GDP; today they’re five times the size of GDP – and in the UK, ten times GDP. Yet the extractive system says those assets must continually grow, which means ginning up new ways to extract from ordinary people and the planet. This relentless suctioning force is behind many crises of our day: the mortgage crisis of 2008, the student debt crisis of today, inflated housing prices, our inability to tackle climate change, the billionaires and corporations capturing democracy. 

The Foundational Role of Ownership 

Progressives don’t customarily think of property and ownership as the ground of transformation. But it’s the ground where what we value – like the WEALL needs of Dignity, Nature, Purpose, Fairness, and Participation – can find protection. Through democratic forms of ownership, ordinary people have a voice, and the purpose of economic activities is to preserve nature and advance human well-being. 

Democratic ownership is core to a democratic economy. Getting there means, first of all, a great ownership transition – moving ownership from the hands of the few to the hands of the many. The models of democratic ownership we need are all around us. 

The most straightforward is public ownership and control – like the UK’s National Health Service. In the US, 80 percent of Americans get their water through municipally owned and operated water utilities. This public ownership delivers better service at lower cost than investor-owned water systems. By contrast, after Margaret Thatcher privatized water systems in the UK, the investor-owned Thames Water allowed so much sewage to build up in the River Thames that some called their part of the river “crappuccino.”  

Community controlled land and housing is another part of a great ownership transition. The community land trust (CLT) is a model that takes land out of the speculative market, to preserve affordability of houses. The land is owned by a nonprofit CLT, which is controlled by a community board; homeowners privately own their homes and have 99-year leases. In the financial collapse of 2009, CLT homes in the US had foreclosure rates below 1 percent, compared to 5 percent for homes with conventional mortgages. 

With private business enterprises, a great ownership transition means advancing various democratic models, like the worldwide network of cooperatives, as well as worker ownership, perpetual trusts, and B Corporations (chartered to serve the public good). One powerful example was the decision by Yvon Chouinard, founder of Patagonia, to donate $3 billion in shares to trust and nonprofit ownership. By doing so, he turned his company into an engine for sustainability. The purpose and profits of this firm are now legally dedicated to saving the Earth.  

In addition to a great ownership transition, a second large shift needed is a next system of capital. Finance needs to support the goal of sustaining life, rather than extracting maximum gains for a few. Credit unions, owned by their depositors, and public banks designed to support productive local enterprise rather than investors are forms of a democratically owned financial institutions.  

Working Together to Build What Could Be

Too often, these various forms of ownership and finance are thought of in isolation, as silos of disconnected activity. We can recognize that together they’re part of an emerging democratic economy. By collectively imagining that next system, we help others to see that another way is possible. 

System change means moving beyond our archaic property regime, built to preserve wealth privilege. Like WEALL, TDC is committed to advancing a new paradigm, a democratic economy that embraces equity and fairness, and reveres the earth as sacred ground.

I hope we stay in dialogue. If you’d like to read Wealth Supremacy, TDC has arranged a special 30% discount for WEAll members (at BKConnection.com, enter the code FRIENDS at checkout). As author, I’d love to speak to a reading group of WEALL members. By collaborating we build our movement.

Marjorie Kelly is distinguished senior fellow at The Democracy Collaborative, a think and do tank working to catalyze a democratic economy. She is author of Wealth Supremacy and other books, including The Making of a Democratic Economy with Ted Howard, cofounder of TDC.