Building a Living Democracy
Beyond Socialism and Capitalism
by Gar Alperovitz
Sojourner, April 1990

Page 6 of 9
Community Investment and Community Inheritance

A further feature of planning for community and liberty involves still another element of a longer range vision: Businesspeople and conservatives commonly argue that a society's wealth should belong to those who take risks and invest capital. Labor organizers and progressives commonly argue that those who work should receive the fruits of their labor.

A more fundamental understanding, both economic and moral, involves a somewhat different emphasis than either traditional view. Compare, for example, the living standards of most African countries with the United States. Entrepreneurs invest in both Africa and the United States, and workers work, often very long and hard hours, in both societies. Radical differences between the wealth of nations are related to the long history of a much longer and larger community investment over many years and many generations--the generations of schooling, the build-up of highways and waterways, the evolution of overall skill levels, the slow and steady build-up of an alternative productive culture.

Still more fundamental, of course, is the much longer and larger community investment which produced centuries of science--from before Newton to after Einstein--and the development of technologies and inventions (and education in the skills to use the technologies) among hundreds of thousands of scientists and engineers and millions of skilled working people. This investment is the most important factor. When a bright young computer inventor in the late 1960s produced an innovation which makes him a millionaire, he commonly thought he "deserved" all that he has received. His invention, however, would have been literally unthinkable without the generations--indeed centuries--of knowledge, skills, wealth. He picked the best fruit of a tree which stands on a huge mountain of human contribution.

We rarely explicitly recognize this "community inheritance." A new vision might make it a central feature, both morally and politically. Building on inheritance laws and public land precedents, we might slowly evolve our thinking so that all major wealth (not necessarily small businesses and homes) would regularly be returned to the community that ultimately made the creation of the wealth possible.

A public trust to establish community ownership of such wealth--at the national, state, regional, and local level--could in turn produce a stream of income, part of which might be used by the community as a whole to offset taxes and provided needed services and part of which might be allocated to provide direct economic stability and security to individuals in the interest of a new structural basis for human liberty and democratic participation. Public-trust control of substantial economic wealth could also help in the implementation of planning for more stable communities.

A tiny group of Americans own huge shares of the nation's wealth today. A recent Federal Reserve Board study shows that the top one-tenth of American households owns almost as much of the nation's household wealth as the entire bottom 90 percent taken together. The top 1 percent alone owns just under 32 percent of such wealth. The moral case for this wealth being passed on through inheritance to those who do not even claim to have earned it is exceedingly week. A major tightening of inheritance laws could become one important basis of a new approach. Within local communities, major buildings and major land ownership (again, not necessarily individual family homes) might pass over time to the local community as a whole--a shift which could both produce revenues and help in the development of new community-building land use and location strategies.

A more creative use of "eminent domain" powers might also ultimately play a part in a comprehensive strategy. At the same time, a new approach might wisely allow true individual entrepreneurs to pass on a significant share of what they personally earn in one lifetime.

(Noteworthy in this connection is the current Alaskan practice in which an acknowledged community-wide interest in oil royalties has built up a large "permanent fund" which presently yields a direct cash payment of almost $1,000 to each resident; at the same time an equal amount is allocated to publicly determined uses. Precedents of this kind may be of particular interest when longer range technological projections that might provide the basis for new approaches in the coming century are taken into account.)

Recognizing that the community as a whole plays a fundamental role in the creation of wealth and of new technologies, and in the overall development of education and skill levels, could also help undergird a revitalized effort to "reclaim our communities"--at the local, state, regional and national levels--from the developers and special interests and their current bureaucratic allies who now commonly dominate "public" decision making.