Amid the despair of Trump’s America, a new economy is being built

Right now, local leaders can demonstrate that a better system is possible

Cleveland, where progressive city leaders are fighting for change

Challenging right wing populism requires building an economy that shares wealth more widely.  Rather than waiting for Westminster or Washington, those concerned can use best practice in local government to move beyond an economic model that has put vast wealth into the hands of so few.

Let’s be clear, globalisation has not delivered for many in the UK.  Liberalisation of land, labour and money has allowed those with wealth to accumulate ever more riches, while those without have seen stagnant incomes, precarious employment and worsening housing conditions.

One in five UK workers could now lose their job at short notice.  Home ownership is at its lowest level in thirty years.  Debts levels have returned to pre-2007 levels.  People are understandably angry.

Ownership of wealth is now a new political cleavage, and populists on the right are exploiting the situation.  Trump, Farage and Le Pen pivot from economic dissatisfaction to anxiety about levels of migration, and from scrutiny of public institutions to calls for the parliamentary swamp to be drained.

We should not expect this Government to deliver the economy needed to challenge such populism.  But how can we on the left begin the task creating a new economy?

Even in the despair of Trump’s America, there are reasons to be hopeful. In Cleveland, Ohio, amid the ruins of a broken economic model, progressive city leaders are developing an approach to economic development that can provide a template for an economy of the future.

They are using public institutions (hospitals, local governments, universities) to support the development of co-operative and mutual enterprise, ensuring that wealth is created, retained and shared locally.

This ‘Cleveland Model’ has three components:

–          Public institutions procure goods and services from enterprises that distribute profits to their employees and the wider community.  In the UK, this means public bodies making use of the procurement powers associated with the Social Value Act.

–          An investment fund that supports co-operative, mutual and social enterprise start ups, with political leaders encouraging public bodies to invest patient capital, expecting moderate returns over the long-term rather than short-term maximisation.

–          As co-operative, mutual and social enterprises benefit from reformed procurement practices, local authorities stipulate local employment from within deprived communities.

These actions can create a virtuous cycle of local wealth creation, moving beyond the vicious cycle that sees local authorities doing all in their means to attract outside investment, only for investors to leave during the next downturn.

It also puts more emphasis on growing local ownership, ideally in the form of co-operative and mutuals.  This means profits are re-invested into local workforces or business development, rather than siphoned off as profits to outside investors.

As outlined in the Co-operative Party’s new report — By Us, For Us — local leaders can begin the task of building a new economy now.  Labour councillors in Preston have already begun this work, changing their procurement practices and supporting the growth of local co-op and mutual enterprise.

If we are to stand up to politics that offers false hope and turns neighbours against one another, we must do what we in the Labour and Co-operative movements have always done — demonstrate through action that a better economy is possible.

But not only will a new model of economic development begin to address the economic conditions that have fueled right wing populism.  It will also mount a challenge to the politics of negativity, anger and blame.

Ours is a politics of action, equality and hope, built on the traditions of ordinary people coming together to better their lives.  When we speak of these with confidence and pride, our authenticity appeals to voters.

And when we act on these principles we can begin change the way our economy works today.

James Scott is the Co-operative Party’s Policy Officer, and co-author of ‘By us, for us: A co-operative agenda for the enhanced city and county regions

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