In the part 1 I addressed the Caja Laboral Popular (CLP) of the Mondragon Cooperative Corporation as one example of an alternative to capital. In this posting I want to address other alternatives.
According to Gar Alperovitz, in his book “America After Capitalism”, a Community Development Corporations (CDC) is a “self-help entity that operates at both the community-building level and the economic level.” He goes on to say that the CDC, “initial goal involved a community-building vision and included the provision of services, the ownership of productive enterprises, and advocacy on behalf of local residents.” Along with CDC’s there are Community Development Financial Institutions (CDFI’s), which are meant to provide credit and capital to low income and economically distressed communities.
One example of a CDC is the Bedford Stuyvesant Restoration Corporation (BSRC) in New York City. The BSRC provides start-up capital along with other assistance to local businesses as well as training programs for local residents. The BSRC is self-funded through its ownership of Restoration Plaza, a construction firm, a property management company, a supermarket, and a theater.
Another example is the Kentucky Highland Investment Corporation (KHIC), which seeks out and provides venture capital as well as ongoing support for entrepreneurs in areas of Southeaster Kentucky with high poverty. One of the requirements of these new enterprises is that they must promise to hire unemployed residents from those areas.
We’re now prepared to explore a possible model of non-capital investment mechanism to replace capital, which will be covered in a future installment.