The secret to getting ahead is getting started.   –Mark Twain

America’s 7,500 credit unions finance the needs of its 91 million members with $1 trillion in deposits.  America’s 7,500 FDIC insured banks finance the needs of it depositors and corporate America with $14 trillion of deposits.   If the deposits of both institutions were reversed, we would see a dramatic change in the American landscape from sea to shining sea:   The economy would be much larger with trillions of dollars in new GDP; millions of new jobs would be created; average wages and salaries would rise significantly; unemployment would fall; federal budget and trade deficits would fall; a host of social ills would disappear such as poverty, lack of health care, suicides, illiteracy rates, mental health issues, crime rates, incarceration rates, obesity rates, and social immobility; and there would be a dramatic shift in the income and wealth curves—downward—from the very rich to all others.  Everyone would be better off including the very rich.

Is all of this possible just by switching deposits from one financial group to another?  Almost.  And the rest of this article explains how and why and what else needs to take place.

The transformations noted would come about as the result of a shift in capital from one that is oriented toward corporations to one that is oriented toward communities.  Corporate capitalism is one in which profits and wealth flow into large corporations, thence to a handful of individuals at the top.   In this kind of structure,  more and more wealth accumulates to a very small number of people, while less and less flows to a very large number who make the system work but do not receive their fair share of that wealth.  Today’s corporate elite and their heirs and benefactors hold 85 percent of all wealth, or $53 trillion worth.   Perhaps another $12 trillion is stashed away in offshore tax havens.   All the rest of us hold just $9 trillion, and more likely than not, nothing at all in offshore accounts.

In contrast, community capitalism is one in which all profits flow back into the community and into small businesses where it is produced.   If the dollar flows noted in the opening paragraph started to change on a gradual basis, over time, the wealth and income flows would also begin to shift.

Money in circulation is what makes the economy work.  U.S. dollars in foreign bank accounts do nothing for GDP or job creation or for tax revenues to help fund national needs.   Even dollars held in U.S. securities and investment accounts produce very little GDP or jobs.   It is a false notion that tax breaks that go into such accounts somehow stimulate the economy and create jobs.  They do not.

Jobs and wealth are created when money gets into the hands of entrepreneurs and small businesses.   Huge money flows to the 63,000 CEOs, and to the 3,700 private equity managers do not created jobs.  It creates wealth for the few, but it also causes unemployment and poverty for the many.   Community-based capitalism can begin to change all that.

Community-based businesses are varied.  They range from small businesses to worker-owned companies to farm co-ops to utility companies.  The key difference between them and  large corporations is that profits are directed  back into the companies for business expansion and job creation; they to not flow to CEOs and executive staffs and into bonuses, perquisites, lavish retirement packages and stock options, or to offshore tax havens. 

Summary.  Community capitalism is an idea whose time has come. It is capitalism of, by, and for the people.  It is a bottom-up,  middle-outward expansion of capital and businesses, owned and operated by the bottom 99 percent of Americans who believe in our future.  It is based on all the values and all the ideals of our founding fathers.  It is a belief in ourselves and in controlling our own destinies.  It is also an acknowledgement that corporate capitalism has failed, and it has given us the widest gap in wealth and income in human history along with all the realities of that failure:  slums, poverty, lack of health care, unemployment, and despair. Community-based capitalism is not socialism, or welfarism, or anything but ownership capitalism. 

Community capitalism needs capital.  We, the bottom 99 percent, need to begin a huge transfer of capital away from the giant corporate banks that fuel corporate capitalism, and into community banks and credit unions.  If just 10,000 depositors moved $10,000 each that would total $100 million dollars in new deposits.  Repeat that step 10,000 times, and communities would have $1 trillion in new capital from which to  launch, expand, and grow tens of thousands of community-based ventures.  A new wave of optimism would prevail, and we would be well on our way to realizing the American Dream for a new generation of Americans where life, liberty, and the pursuit are re-awakened and everyone has a chance at realizing his or her potential. 

A new website will be launched on July 4, 2013 that incorporates these ideas.  It will contain more and more details of what needs to be done, the progress that is being made, and what you can do to keep this movement growing.   It will require a consolidation of efforts, and there will be failures.   And there will be opponents who will try to stop it, and naysayers who cannot dream or put their trust in anything.  This movement begins with trust in yourself, in reliance on the same goals and dreams that were held by those who built America—your parents, and grandparents, and great grandparents. 

Community capitalism begins with moving capital to your community credit unions.

New website:  www. AmericanWealthNetwork.org

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Further Reading:

• Rebuilding America, with J. Faux (New York: Pantheon, 1984)
• American Economic Policy, ed. with R. Skurski (Notre Dame: University of Notre Dame Press, 1984)
• Making a Place for Community, with D. Imbroscio and T. Williamson (New York: Routledge, 2002)
• America Beyond Capitalism: Reclaiming our Wealth, Our Liberty, and Our Democracy (John Wiley & Sons, ISBN 0471667307, October 2004)
• Building Wealth: The New Asset-Based Approach to Solving Social and Economic Problems (Washington, D.C.: The Aspen Institute, April 2005) (Democracy Collaborative Report, under the direction of Gar Alperovitz)
• Unjust Deserts: How The Rich Are Taking Our Common Inheritance and Why We Should Take It Back, with Lew Daly (New York: New Press, 2008)
• What Then Must We Do?: Straight Talk about the Next American Revolution (Chelsea Green, 2013)
• In Search of Community Conscious Capitalism
• Community Capitalism (E2M)
• Fast Company, March 2007
• Wall Street Journal, July 28, 2008, Jeff Bennett, Class Act, Kalamazoo's lesson: Educate and they will come
• Lessons from Kalamazoo