Who are we stimulating anyway?
By Ojan Mobedshahi, our Finance Director
How can we channel the energies of this recession, the “stimulus,” and of COVID-19, to uplift our communities and come out stronger on the other side? The steps we take now will lay the foundation for what comes next. We need to imagine different ways of doing business that work for the community!
COVID Disaster Capitalism
Disaster Capitalism is nothing new. As Naomi Klein details in her book The Shock Doctrine, mega-corporations have dealt in Disaster Capitalism for decades. Generally the concept describes corporations using extreme circumstances during disasters (hurricane, recession, political coup, etc,) to expand their corporate empires faster than ever. This “opportunism” has devastating impacts for communities.
Many people could lose everything in the coming recession... Not just jobs or small businesses, but their homes, communities, and even their lives. At the same time, certain economic players are going to use this crisis to expand.
To start with, let’s examine some of the tactics and “opportunities” mega-corporations take advantage of during a disaster. During a recession or disaster, the ultra-wealthy can…
- Buy out and consolidate small businesses;
- Buy property for cheap;
- Benefit from government-funded corporate bailouts and massive government contracts;
- They can take advantage of suspension of environmental laws; and
- They also tend to be the ones who benefit from panic-buying, growing their businesses.
This does not look good.
Amidst all this bad news, the public outpouring of support and care has been enormous. Yet I worry about how this outpouring of aid funding, coming from the hearts of good people around the world, will unintentionally contribute to inequality. The question is, who will be profiting from the mutual-aid and charitable activities? The volunteers are not profiting. The recipients of the aid are certainly benefiting, but they are not profiting either. The profits go to the businesses that are patronized. So where will the money be spent?
A large portion of donated funds will be spent on basic goods like food and sanitary supplies to be distributed by mutual-aid volunteers. Another large part will be directly transferred to individuals, who will then spend it on their own basic needs including food and sanitary supplies, as well as utilities and rent.
So there are two big categories of winners here.
- Corporate Landlords, and big banks. The housing crisis is about to get a lot worse. Millions of people have lost their jobs and will default on their mortgages, or miss rent. The eviction moratoriums that have been passed are just accruing debt for the poor until the moratorium is over, and then the back-rent will come due. Homeless numbers will expand. Banks and mega-corporations will foreclose and buy up countless homes. The government is giving people $1,200 to continue paying rent to the landlords, and for homeowners to keep paying their mortgages to the banks. This temporary relief will only kick the can down the road for everyday people. Meanwhile, corporate landlords and banks will reap a profit. Even a universal basic income will just continue to subsidize the owning class, unless there is deeper structural change, because the rents will continue to gobble up the money.
- Food and supply distributors. While we might not be buying as many luxury goods right now, everyone still needs to eat, and we are cleaning more than ever. The businesses who get the most of this spending will survive the crisis very happily, while the businesses who don’t see traffic, might not make it.
Stimulate the Next Economy
But there is hope!
What if the Big Landlords and Banks lose this time? In Oakland there are folks on the front lines like The Village, Youth Spirit Artworks, and Moms 4 Housing who are working to house and protect the homeless. We at the East Bay Permanent Real Estate Cooperative are working to change the system so that 97% of our apartments aren’t owned by corporations, but owned by the people.
What if all of the mutual aid organizations and food banks in Oakland sourced their food and sanitary supplies through worker-owned businesses? We love our local cooperative grocery store in West Oakland: Mandela Grocery Cooperative. Whenever we hosted events (back in the day, remember? events?) we bought snacks from Mandela Grocery Cooperative. It is cooperatively owned and operated, by co-owners who are majority Black.
If we pledged to shop at businesses like Mandela, it might require them to boost their purchasing and capacity, but that would be easy given the influx of cash. It would also give their revenues a massive boost during these trying times. It might allow them to bring on some new staff, or build up a larger reserve to be more resilient during future times. It might allow them to expand into distribution, and help launch the East Oakland Grocery Cooperative.
It would still provide benefit to all the recipients of mutual aid, but would double down on the benefits by keeping the profits in the community, and supporting a local cooperatively owned business to stay strong and expand, instead of funneling those profits into a mega-corp that might buy out Mandela.
Solidarity, Not Charity
The “Normal” economy isn’t working for the people. But for most of us, it’s the only thing we know. We need to imagine different ways of doing business that work for the community!
Instead of reacting to the crisis with just charity, I can imagine a world where ...
- All the profits of mega-corporations are split fairly between all of their employees and/or community! Mandela Grocery Cooperative and Arizmendi are owned cooperatively by all their owners! Patronize them! The East Oakland Grocery Cooperative is just getting started! Check out the Network of Bay Area Worker Cooperatives for more worker-owned companies in the Bay Area! People Powered Solar Cooperative is putting collectively owned solar panels on the community’s rooftops (fire season is coming, expect more shutoffs by mega-corporation PG&E). And Alchemy Collective Cafe is your local majority Black owned Cooperative Coffee Roaster. Anyone in California can support and/or invest in any of these local cooperatives today! Check out their websites!
- Every home and building in the community is owned and managed by the community itself! We at the East Bay Permanent Real Estate Cooperative are building a future of #LandWithoutLandlords, where nobody is a renter, and we own together in community. Anyone in California can invest in our cooperative today! Check out our website!
- During disasters we don’t act with fear, but act with trust, and work together. The Community Democracy Project has been working for years to bring participatory budgeting to Oakland, where we the people get to decide how the city spends its budget. We believe that in a world where every voice is heard, everyone will have a home, and we can work through our challenges with #HellaPeoplePower. Read the petition, get involved, or donate today.
Let’s take this opportunity to consider how we can spend our money wisely so that we not only help those in need, but stop letting mega-corporations profiteer off of that need. Patronize your local co-ops. Invest in your community-led initiatives. If the co-op you’re looking for doesn’t exist, talk to the Sustainable Economies Law Center or the Arizmendi Association of Cooperatives and they’ll help you start one!
If we can help communities build, instead of corporations profit, we might just make these dark times a little brighter.
