Crisis, Recovery, and the Transitional Economy

There is much to ponder as the patchwork of American society continues to unravel from the effects of a new type of capitalist depression. Millions have seemingly resigned themselves to both high and chronic underemployment, an odious condition expressed in phrases like “the new normal” that calls on us to accept what is—deprivation and dysfunction on multiple levels—as opposed to consciously deciding what ought to be. Meanwhile, the only people who can speak of recovery since the onset of the current crisis in December 2007 are the owners and controllers of capital. It is, as Paul Krugman declared in the New York Times last fall, a “Rich Man’s Recovery.”1

Krugman’s comments came in the wake of a report that showed the wealthiest 1% of Americans earned more than 19 percent of the country’s household income in 2012, their biggest share since 1928, a year before the Wall Street stock-market collapse. That’s not all. The top 10 percent also made a record 48.2 percent of total earnings in 2012.2 But what about the majority of working people who for much of 2013 lost ground while running in place? While those at the top raked in profits from soaring corporate dividends and booming stock prices, wages for the 145 million Americans in the workforce inched up a mere 1.9 percent—actually 0.4 percent after adjusting for inflation.3 It was worse for the nearly 25 million who made less than $10.10 an hour—Obama’s desired minimum wage—and just plain awful for the 3.5 million who earned the federal minimum wage of $7.25 or less.4 Finally, let us not forget the 10 million “officially” out of work, which does not include those who simply gave up or retired out of necessity, nor incalculable numbers who are underemployed. As the New York Times economic writer Eduardo Porter recently suggested, it will be extremely difficult to determine the total cost to U.S. society as a consequence of the worst economic crisis since the 1930s.5

Through all of this the Left has failed to muster and sustain a mass movement in response to the crisis. The rise and fall of the Occupy movement attests to this. No matter what diehard supporters claim, its initial dazzle and force was equaled only by the stolid politics that helped to bring about its end. For sure Occupy left us with a powerful legacy, the meaning of who we are as the 99%, so let us embrace it to build anew. To that end, we might look to Occupy’s brief history beyond Wall Street—that is, in the cities and towns where its initial energy was so keenly felt, and where it is likely that many of us have since embarked on new projects that carry the potential of a transitional and transformational politics. Such is the case in Greensboro, North Carolina, a mid-size Southern city known for its struggles for civil rights and socio-economic justice. It is here where the Occupy movement played a small but seminal role in what has become a fierce, grass-roots struggle for cooperative ownership in the African-American community.

Occupy Greensboro arose quickly and spontaneously from the ranks of longtime activists and has welcomed many youthful newcomers to political struggle. Within two weeks of the movement’s birth on Wall Street, organizers in Greensboro pulled hundreds of residents—young and old; white, black, and Latino; straight and gay, middle and working class, the poor and the homeless—to its initial rally downtown.6 At that moment, unemployment in the city stood at 11 percent and the poverty rate at 20 percent, official statistics that were woefully shy of the real numbers in both categories. In the weeks and months that followed, Occupiers held sizeable meetings in the cavernous, back room of a local bookstore situated in the middle of a working-class neighborhood, while a core group physically occupied a site in the middle of downtown. From thrice weekly General Assembly meetings emerged a host of committees and subcommittees that began addressing the city’s most pressing problems; unemployment, foreclosures, economic development, local energy issues, misconduct by the Greensboro Police Department, gender and race, and others. Meetings were lively, and protests soon took place at the site of the greatest symbol of the 1% in Greensboro, the downtown branch of Bank of America. Committees compiled statistics and snapshots relating to growing inequality in the city. Thanks to a timely New York Times story, Occupiers learned that the richest 1% in Greensboro in 2011 earned an average of $344,000, nowhere near the average of $908,000 enjoyed by its counterparts in wealthier parts of America, but still hard to swallow given that the median household income in East Greensboro, where most of the city’s African Americans reside, was $21,617 (the federal poverty line for a family of four that year was $22,350), about half that of predominantly white, middle-class households in West Greensboro ($42, 927).7 Others tapped into the anger in various quarters over joblessness, housing, and a perceived “culture of corruption” in the Greensboro Police Department. All these discussions took place with full knowledge of a pervasive racism in a city often held up as exemplary of the “New South.”

But for all its vitality and promise, the movement quickly fragmented, especially as some older, more experienced members tried unsuccessfully to urge their younger counterparts to recognize how objective conditions cried out for strategic and programmatic politics. Beyond the generational divide, socialists, communists, armchair Marxists, anarchists, liberal Democrats, and progressives of many stripes could not reach common ground. Indeed, the constant squabbling between older members over longstanding differences—at times reducible to sheer egoism or the attempt to settle old accounts in a new setting—only fueled contempt for some of the old guard by younger idealists who, in their unbridled optimism, defended spontaneity against all attempts to forge concrete political objectives, organization, and strategy. More significantly, the inability of Occupy Greensboro to attract and sustain participation from neighborhoods in East Greensboro, where longstanding sufferings were exacerbated by the recent downturn, but whose mistrust of white radicals seemed greater than ever, contributed to its undoing. Within a year, the movement had imploded. The whole experience did indeed illustrate what Marx meant when he wrote that “the tradition of all the dead generations weighs like a nightmare on the brain of the living.”8

Meanwhile, the city continues to experience hard times, though it is not always clear to the public thanks to the shallow and often self-serving efforts of local corporate media. No one muddies the waters more than the usual suspects of corporate and university hacks often given ample space in the local newspaper, the News & Record, to trumpet Greensboro’s “good news” moments of business success, while attempting to make sense of the city’s version of a “jobless recovery” whenever they can. The result is a dizzying ride of daily reporting and so-called analysis. For example, downtown commercial real estate was “red hot” in late summer of 2013, while home sales had risen 30 percent over the previous twelve months to an average price of $174,000, not exactly lower-middle-class housing in Greensboro.9 Then the housing market plummeted in January, which some of the local brain trust blamed on “mixed signals in the economy,” mainly a dismal job market in which many people just stopped looking for work.10 There were also cheers when unemployment dropped from 8.6 percent in late summer to 7.2 percent in January, although a study by Harvard economist Lawrence Katz attributed the decrease almost wholly to North Carolina’s shrinking labor force rather than actual job growth.11

But official numbers mean little in this shadowy economy. No one knows for sure how many residents are underemployed, an ever-growing segment of the local population whose daily existence is indeed precarious and which helps to explain why the poverty rate remains fixed at 20 percent, unchanged since 2009.12 In September, the News & Record reported that one third of the 95,480 living in the city and surrounding county (Guilford), who resided in areas designated as food insecure, had incomes too high to qualify for food stamps (based on the $23,550 poverty line for a family of four); and volunteer groups were finding it increasingly difficult to maintain the city’s food banks.13 Many of these working poor were being hired by local temp agencies, which were booming given a rising demand by local manufacturers for various types of skilled workers paid at rates that are sometimes half what workers used to get when they were permanent employees with good pay and benefits.14 These are folks “lucky” to have a job but unlucky enough not to have the material necessities that carry the potential for a healthy and happy life. Meanwhile, as the working poor grow larger in number, the City Council prides itself on a two-year effort to allocate $30 million in public funding to match a commitment from private donors for construction of a new performing arts center in downtown Greensboro.15

Through all of this, one aspect of Occupy Greensboro’s work has proved seminal in efforts to create cooperative ownership in the local economy. Before Occupy dissipated, an economic development subcommittee had formed to examine several issues, including cooperatives. One subcommittee member, Ed Whitfield, a co-director of the Greensboro-based Fund for Democratic Communities (F4DC) with extensive knowledge about cooperatives, played a pivotal role. The other F4DC co-director, Marnie Thompson, participated in another Occupy subcommittee focusing on home foreclosures. The foreclosure subcommittee remained effective; not so the economic group. But some former members joined Whitfield and Thompson in F4DC’s budding discussions with African-American community leaders in northeast Greensboro, who had struggled since the late 1990s to bring a grocery store to a dilapidated shopping center in their part of town. The shopping center, known as Bessemer Center, had become an empty shell after a Winn-Dixie supermarket left in 1998. Following its departure, the City of Greensboro bought the near-vacant facility in the hope of luring a buyer who would bring in a new grocer. But city leaders failed in their efforts, and the property became a visible sign of northeast Greensboro’s seemingly irreversible decline. Whitfield and Thompson established ties with key northeast residents who together pressed the city to renew its search for a new grocer in the northeast, which by now had become one of seventeen food deserts in the city.16

In forging their relationship with two community groups, Concerned Citizens for Northeast Greensboro (CCNG) and Citizens for Environmental and Economic Justice (CEEJ), Whitfield and Thompson proposed a cooperatively owned grocery store in Bessemer Center that the city would renovate and then rent to the co-op with an agreement that the latter would eventually buy the space. Unlike a privately-owned chain grocer, a food co-op would benefit the community by (1) supplying affordable and nutritious groceries to residents who were among the most impoverished in the city and whose neighborhoods lay in one of the largest of the city’s food deserts, and (2) build new wealth on the basis of cooperative ownership and democratic control in a community badly in need of capital formation but often left out of the city’s plans for economic development. Whitfield attended CCNG and CEEJ meetings to provide details and literature about the co-op grocery store concept; i.e. distributing copies of a “how to” manual for starting food co-ops prepared by the National Cooperative Grocers Association. He also made cogent presentations about differences between profit margins of private grocers and co-ops, the nutritious produce the latter could offer at substantially lower prices, and ways in which profits from the co-op could be reinvested in the community. Most importantly, F4DC’s idea of community ownership and democratic control of neighborhood economic enterprise sparked discussions about how the community eventually could own the entire shopping center and turn profits into new investment capital for northeast Greensboro.

The concept quickly took root within a small but expanding group of citizens in the northeast quarter, as well as among energized and committed white middle- and working-class citizens who had long supported efforts to establish parity between the east and west sides of the city. Concerted moves were taken to involve City Council and key staff. Initially, community leaders in the northeast were heartened by the possibility that the long-awaited parity and fairness in economic development would be coming their way. Even the district representative on City Council, a developer named Jim Kee, seemed to throw his support to the effort, comparing it to a successful co-op grocery startup in the nearby city of Burlington.17

The significance of the whole process began to resonate among residents throughout the city. Here was a project with the potential as a model for other neighborhoods, i.e., in southwest Greensboro with its concentration of working-class whites and Latinos (now almost 8 percent of the city’s population) and where poverty and food insecurity were on the rise. By summer 2012, F4DC staff and residents had created a standing committee, which soon after formally established itself as the Renaissance Community Coop (RCC). Simultaneously, a few other former Occupiers had begun meeting with sympathetic members of City Council to discuss the need for a “new economy” in Greensboro that would utilize public funding, i.e., a bond referendum, to support new, locally owned businesses, including cooperatives. National economic recovery, they argued, would not come from corporate America or further federal government stimulus; instead, each city would have to make its own way to build a twenty-first-century economy.18 In so doing, the public sector would play a vital role in creating economic development that would target real needs in the city’s most vulnerable areas and, in the case of Bessemer Center, a democratically owned cooperative that merged class and race interests.

By spring 2013, the community effort was in full swing and actively seeking support from the city. Representatives of CEEJ and F4DC went before City Council to ask the city to retain ownership of the shopping center, now renamed Renaissance Center, to pay for its renovation, and to provide assistance to the fledgling co-op. Proponents asked Council to guarantee RCC the ability to lease the building for twenty-five years at below-market-rate rent, a $600,000 loan, and a $100,000 grant for start-up. This would support the $700,000 loan that a credit union, Self-Help, had approved based on several contingencies, one of them that the co-op be given first shot at buying the whole shopping center.19 Moreover, the credit union agreement fueled an initiative in one of the community organizations, CEEJ, to form a community non-profit that would eventually would purchase the shopping center by means of a 501(c)3 Community Land Trust.20

The growing possibility of RCC establishing itself as an anchor tenant in a revitalized city-owned shopping center also helped to fuel another key project developing in the northeast. After several years of trying, a partnership had formed between the city, North Carolina Agricultural and Technical State University, and a nonprofit in the northeast to launch a four acre community garden on city-owned land less than a mile from Renaissance Center. The initiative came from Terrence Thomas, a professor in A&T’s School of Agriculture and Environmental Sciences, who had secured a startup grant from the U.S. Department of Agriculture. As project leader, Thomas also began developing a plan for the eventual transfer of the garden to a cooperatively owned enterprise to permanently supply fresh and nutritious produce to the community directly and the co-op below the usual retail prices.21 Some in the northeast began to see the merit of the two projects coming together, both aimed at solving the problem of food insecurity in the northeast.

However, there were serious challenges along the way. Private interest, lust for profit, deception and manipulation, mistrust from longstanding racial divisions in the city, ignorance about cooperative ownership—all factored into the political struggle about who should own the shopping center and whether the RCC was a viable tenant. The City Council quickly split on the issue. Some members saw the merit of the RCC and were willing to explore ways whereby the city would renovate the shopping center, find someone to manage it, support the co-op’s desire for tenancy, and consider how the community might eventually own the whole thing. But a slim majority began pushing for its sale to a development group called Renaissance Center of Greensboro (RCG) represented by Melvin “Skip” Alston, a high-profile black entrepreneur and former chair of the Guilford County Commissioners. For this faction, which included the white mayor and mayor pro tem, a black woman who was formerly the city’s first black mayor, pragmatism was the bottom line. The city, they argued, should not be in the shopping center business, though they conveniently ignored other projects where the city had retained ownership to ensure success. Moreover, they justified their position by arguing that the responsibility for economic recovery in Greensboro lay with private enterprise, not local government.

The black community also became increasingly divided over which group to support, a division fueled by Alston’s attempt to bully CEEJ with the help of Kee, the city councilman from the northeast who cunningly switched sides by voicing objections about the drag on the city’s tax roll for its continued ownership of the facility and his doubts about a cooperatively owned grocery store. Consequently, Kee steered the leadership of the other black community group, CCNG, toward Alston and his developers, the latter whose businesses in East Greensboro included convenience stores that sold limited staples and lots of junk food at high prices. The result was a series of tumultuous community and City Council meetings that polarized the black community, one group backing a petty-capitalist entrepreneur who claimed to represent the interests of his community, and the other which promoted the alternative of cooperative ownership in the northeast. To further obfuscate the truth about cooperative ownership and its potential multipliers, supporters of the Alston group expressed concerns that white people in the opposing camp were trying to tell blacks what to do in their community. In the process, they abruptly changed course in their longstanding demands that the city turn its resources and capital investment toward East Greensboro, which was usually supported by whites, to declarations of self-help.

Such was the political context of City Council’s five-four vote on June 4 to begin negotiations to sell the shopping center to the Alston group (RCG) for $490,000, and also provide a $2 million forgivable loan to RCG to renovate the plaza. To reward residents who supported RCG, Kee engineered a provision of the deal that required it to transfer 43 percent of the available space to a community non-profit which, in turn, would lease part of that space to the co-op.22 But the agreement quickly unraveled as City Council became sensitive to rising criticism from a cross-section of northeast residents who were angry over Alston’s motives and RCG’s intended use of the $2 million loan. The boiling point came in a July 30 community meeting when Alston was shouted down for being more interested in profit than people because RCG had no plans to use any of the $2 million to renovate the non-profit’s space.23 Moreover, council members soon confirmed that RCG would not hold to its June 4 agreement to spend $2 million of its own money on renovations. When RCG refused to meet new conditions imposed by the city and backed out of the deal in late September, the whole process opened up once again.

By then, a new plan consistent with the initial objective of a revitalized shopping center in the service of legitimate community needs was taking hold among residents and City Council. On February 19, 2014, the Council voted unanimously to enter into negotiations with the Self-Help Venture Fund, a non-profit community development financial institution based in Durham, NC, with a solid history of helping minorities and low-income people buy homes and build businesses. At the time of this writing, both parties are working out a deal whereby the city will sell the shopping center to Self-Help, which will do the renovations and then lease space with $2 million from the city.24 Self-Help has made it clear that the RCC will be an anchor tenant. It has also created an advisory board of residents who will participate in the design of the shopping center and help to choose other tenants. Meanwhile, RCC continues to build its own organization, membership, and funding; its newly created board promises that the co-op will be ready for business when renovations to the shopping center are completed, perhaps before the end of the year. Even better, the joint effort to launch the nearby community garden project is also moving forward.

As a result of all these developments, the effort to build cooperative ownership in Greensboro is underway. No doubt, the material conditions that fuel the need and political will for democratic control of wealth through neighborhood cooperatives of all kinds—grocery stores, urban agriculture, daycare centers, automotive repairs, and others—will only worsen. Then, too, efforts to satisfy the city’s wealthy and privileged elites, such as the Council’s decision to provide $30 million of public funding for a new downtown performing arts center—on top of $11.5 million to purchase the land, as well as the cost of its upkeep and operation for years to come—to the $35 million pledged by the private sector, will only serve to widen the gap between rich and poor. According to a recent study by Stanford University researchers Sean F. Reardon and Kendra Bischoff, the middle class in the Greensboro-High Point metro area declined from more than half of the population to about 45 percent during the last decade. At the same time, the proportion of families living in either poor or affluent areas surged from 15.2 to 32.2 percent. No metro area saw a more dramatic increase in the proportion of families living in either poor or affluent areas.25

Given these conditions, cooperative ownership in East Greensboro will bring relief to neighborhoods denied the prosperity of past times and now suffering the worst of the current economic crisis. In immediate terms, it will bring sustenance to a food desert and give some people employment in the co-op and shopping center. But its multiplier carries greater potential. The capacity to turn profit into social capital formation by reinvesting in other cooperative enterprises will be determined by the ability of the community to grasp the seminal importance of community ownership as the essence of participatory democracy. In that sense, the resurrection of the old Bessemer Center will indeed mark a renaissance fitting of its new name.

And yet such an outcome would be better understood not as a rebirthing, but rather a new beginning bearing the enduring communitarian instincts of a long-suffering community into a new day. Of course, it will be a tough road. Already, proponents of cooperative ownership have faced opposition from an entrenched power structure that has the ability to turn supporters in local government and ruling circles into opponents in an instant. Secondly, capital of any color always has the edge when it comes to making arguments about the virtues of private enterprise simply because it is perceived as the only alternative. Then there is the ever present dynamic of race, which often tears at any agreement between well-intentioned people.

Indeed, something quite significant did emerge from Occupy Greensboro and not only with respect to this initiative. In retrospect, we can see that the failure of a movement focused on Wall Street enabled us to criticize our own, local financial houses and, as a consequence, led some of us to its antithesis, cooperative ownership. If the whole movement had recognized the political will to organize and plot concrete, uniform actions in New York and elsewhere, we might be further along in building a viable left movement on the national level. But while that did not happen, the main political message of Occupy resonated deeply through cities and towns. We took up the task of building it here in Greensboro and failed—only to find acorns that might one day be oaks.

Here is a sign toward a transitional economy that is fundamentally democratic and potentially socialist. “Truth,” the young Karl Marx wrote, “includes not only the result but the path to it.”26 What is happening in Greensboro today, and likely in the immediate future, cannot be considered socialist in the strictest sense. But it is surprising and surely heartening to hear citizens remark that capitalism isn’t working and, indeed, will never work. I am also reminded what a longtime black resident told me years ago when I first came to Greensboro in the aftermath of the November 3, 1979, murders of five members of the Communist Workers Party by a group of Klansmen and Nazis. Black people, he said, don’t need to be told what socialism is all about. Hell, we’ve been practicing it for a long time. How do you think we survived without money and means?

Perhaps we might connect this to what Marx himself said about cooperatives in the Inaugural Address to the International Workingmen’s Association in 1864. More important than the historic achievement of the Ten Hours’ Bill as the great “victory of a principle…the first time that in broad daylight the political economy of the middle class succumbed to the political economy of the working class,” was “a still greater victory of the political economy of labor over the political economy of property,” the cooperative movement in English factories. Marx continued:

Marx quickly added that the experience of the period between 1848 and 1864 “had proved beyond doubt that, however excellent in principle, and however useful in practice, co-operative labor, if kept within the narrow circle of the causal efforts of private workmen, will never be able to arrest the growth in geometric progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their masters.”

For Marx, the cooperative movement was one very important step toward the “great duty of the working class,” the conquest of political power.28

Notes

1. ↩Paul Krugman, “Rich Man’s Recovery,” New York Times, September 12, 2013, http://nytimes.com.
2. ↩Associated Press, “Richest 1% earn biggest share since ‘20s,” September 11, 2013, http://jamaicaobserver.com.
3. ↩Nelson D. Schwartz, “Payroll Data Shows a Lag in Wages, Not Just Hiring,” New York Times, February 7, 2014, http://nytimes.com.
4. ↩Steven Greenshouse, “The Walls Close In: Low-Wage Workers Finding It’s Easier to Fall Into Poverty and Harder to Get Out,” New York Times, March 16, 2014, http://nytimes.com.
5. ↩Eduardo Porter, “Recession’s True Cost Is Still Being Tallied,” New York Times, January 21, 2014, http://nytimes.com.
6. ↩Joe Killian, “600 March Downtown,” News & Record, October 16, 2011, http://tmcnet.com.
7. ↩Shala Dewan and Robert Gebeloff, “Among the Wealthiest 1 Percent, Many Variations,” New York Times, January 14, 2012, http://nytimes.com; Michael E. Tabb and Mike Neal, “Balanced Economic Development: A Strategy Plan for East Greensboro” (Colliers International and Red Rock Global, 2011), http://eastmarketstreet.com, 22.
8. ↩Karl Marx, The Eighteenth Brumaire of Louis Bonaparte, in Karl Marx-Frederick Engels Collected Works, vol. 11 (Moscow: Progress Publishers, 1979), 103.
9. ↩Richard M. Barron, “Ready for Liftoff,” News & Record, August 25, 2013, http://news-record.com.
10. ↩Richard M. Barron, “Greensboro home sales have nowhere to go but up in 2014,” News & Record, March 18, 2014.
11. ↩Economic Research, Federal Reserve Bank of St. Louis, “Unemployment Rate in Greensboro-High Point, NC (MSA),” http://research.stlouisfed.org; “Employment spin,” News & Record, January 9, 2014.
12. ↩Richard M. Barron, “Income, Jobs Weigh Down City’s Growth: Greensboro economy still has miles to go,” News & Record, January 16, 2014.
13. ↩Kelly Poe, “Working poor struggle in Greensboro,” News & Record, September 2, 2013.
14. ↩Richard M. Barron, “Temp jobs increase in Triad: Personnel companies ride the wave of changing economy,” News & Record, April 28, 2013.
15. ↩Dawn DeCwikiel-Kane, “Arts center gets a name,” News & Record, September 10, 2013.
16. ↩Joe Killian, “For some, finding food can be tough,” News & Record, June 2, 2013. The article defines a food desert as “low-income areas where at least 33 percent of the people are more than a mile away from a grocery store or supermarket.”
17. ↩Marnie Thompson, “The Early History of F4DC’s Role in Community Based Efforts to Build a Cooperative Grocery Store at Bessemer Center,” May 14, 2013. http://f4dc.org.
18. ↩Larry Morse and Michael Roberto, “Strategy to grow local businesses would help revive East Greensboro,” News & Record, May 12, 2013.
19. ↩Amanda Lehmert, “Council considers options for Bessemer plaza,” News & Record, May 8, 2013.
20. ↩Fund for Democratic Communities, “A Pathway to Responsible Community Ownership of the Renaissance Center,” May 25, 2013 (updated August 7, 2013), http://f4dc.org.
21. ↩Terrence Thomas, Research and Action for Empowering Residents of Food Desert, United States Department of Agriculture, NIFA, Evans Allen Funded Project, NC.X-999-5-09-120-1, 2014.
22. ↩John Newsom, “More details in Greensboro’s sale of Bessemer Center,” News & Record, June 5, 2013.
23. ↩Joe Gamm, “Residents criticize Alston over site,” News & Record, July 30, 2013.
24. ↩Amanda Lehmert, “Greensboro closer to selling shopping center to nonprofit,” News & Record, February 19, 2014.
25. ↩Jordan Green, “Pulling Apart: The Piedmont Triad’s rapidly expanding income gap,” Yes! Weekly, January 11–17, 2012, http://yesweekly.com.
26. ↩Karl Marx, “Comments on the Latest Prussian Censorship Instruction,” Collected Works, vol. 1. (Moscow: Progress, 1975), 113.
27. ↩Karl Marx, “Inaugural Address of the Working Men’s International Association,” Collected Works, vol. 20 (Moscow: Progress Publishers, 1985), 11.
28. ↩Ibid, 12.