How Worldwide Adoption Of Community Wealth Building Models Reshapes Economies

The dominant model of economic development in the twentieth and twenty-first centuries is extractive. Not just in the obvious cases -- mining, logging, oil -- but structurally. Wealth flows from periphery to center, from labor to capital, from community to shareholder.

Consider the mechanics:

- A retail worker in a small town earns $12/hour working for a national chain. The chain's profit goes to corporate headquarters in another state or country, then to shareholders via dividends and buybacks. - A city offers $3 billion in tax incentives to attract a tech company's headquarters. The company employs some local workers but imports most of its workforce, and the resulting real estate inflation displaces existing residents. - A developing country's mineral wealth is extracted by multinational corporations, processed elsewhere, and sold in wealthy markets. The country retains a fraction of the value as royalties, often captured by corrupt elites.

The pattern is consistent: communities provide labor, land, resources, and public infrastructure. Capital provides employment. But the returns to capital flow out, while the costs -- environmental degradation, displacement, dependency -- remain.

Community wealth building inverts this flow.

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The Democracy Collaborative, the think tank most responsible for developing CWB theory and practice, identifies five pillars:

1. Anchor Institutions

Hospitals, universities, local government agencies, and utilities are anchor institutions -- large employers that are rooted in place by mission rather than market logic. A hospital can't offshore its emergency room. A university can't relocate its campus. These institutions represent massive, stable flows of purchasing power.

CWB strategies redirect that purchasing power toward local suppliers. When a hospital buys its linens from a local worker-cooperative laundry instead of a national chain, the money stays in the community. When a university sources food from local farms, the agricultural economy strengthens.

The scale is significant. In Cleveland, the combined annual purchasing budget of the Cleveland Clinic, University Hospitals, and Case Western Reserve University exceeds $3 billion. Redirecting even a fraction of that toward local enterprises has transformative potential.

2. Worker Cooperatives

In a worker cooperative, employees own the business and share in its profits and governance. The Mondragon Corporation in Spain's Basque Country -- with over 80,000 worker-owners across more than 250 companies -- is the largest and oldest example. Mondragon has survived recessions, industry shifts, and globalization while maintaining employment and community stability that investor-owned firms in the same industries could not.

Research consistently shows that worker cooperatives produce: - More equitable income distribution (pay ratios between highest and lowest earners are typically 3:1 to 9:1, compared to 200:1 or more in conventional corporations). - Greater job stability (cooperatives are less likely to lay off workers during downturns). - Higher worker satisfaction and productivity. - Local wealth retention (profits are distributed to worker-owners who spend locally).

3. Community Development Financial Institutions (CDFIs)

CDFIs are financial institutions -- banks, credit unions, loan funds -- with a mission to serve underserved communities. They provide capital to borrowers (small businesses, affordable housing developers, community organizations) that conventional banks reject as unprofitable.

In the US alone, CDFIs manage over $222 billion in assets and have financed millions of affordable housing units, thousands of small businesses, and hundreds of community facilities. Their default rates are comparable to or lower than conventional lenders, debunking the myth that lending to poor communities is inherently risky.

4. Community Land Trusts (CLTs)

A CLT acquires land and holds it in trust for the community permanently. Housing or commercial space built on CLT land is sold or rented below market rate, with restrictions that prevent resale at speculative prices. The land is never sold -- it's held in common, ensuring long-term affordability.

There are over 300 CLTs in the United States, with growing adoption in the UK, Belgium, France, Kenya, and elsewhere. The Champlain Housing Trust in Burlington, Vermont -- the largest CLT in the US -- manages over 2,800 housing units that have remained permanently affordable for over 35 years.

5. Local and Democratic Ownership

CWB promotes diverse forms of democratic ownership: municipal enterprises (publicly owned energy, broadband, water), community benefit societies, social enterprises, and platform cooperatives (digital platforms owned by their users or workers, like Stocksy for stock photography or Up & Go for home cleaning services).

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Preston, a city of approximately 140,000 in Lancashire, England, adopted CWB as its primary economic strategy after conventional regeneration plans collapsed during the 2008 financial crisis.

Under the leadership of Matthew Brown (now an MP) and with advisory support from the Democracy Collaborative and the Centre for Local Economic Strategies (CLES), Preston implemented:

- Anchor institution procurement redirections: Six major institutions (the city council, Lancashire County Council, the University of Central Lancashire, Preston's College, Cardinal Newman College, and Community Gateway Association) analyzed their spending and shifted procurement toward local suppliers. Local spending increased from approximately 5% to 18% of total institutional procurement. - Cooperative development: The council supported the creation of new cooperatives and helped convert existing businesses to cooperative ownership. - Municipal banking: Preston explored the creation of a regional community bank, modeled on German Sparkassen (publicly owned local banks). - Living wage: The council adopted a living wage policy and encouraged anchor institutions to do the same.

Results: Between 2014 and 2019, Preston went from being ranked the 49th most deprived local authority area in England to being ranked outside the top 50. Unemployment dropped. The city won "Most Improved City" in the PricewaterhouseCoopers Good Growth for Cities Index in 2018.

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CWB is not inherently Western or Northern. The principles -- local ownership, democratic governance, wealth circulation -- are present in cooperative traditions across the Global South.

- India: The cooperative movement includes over 800,000 cooperatives with more than 290 million members, spanning dairy (Amul), banking, housing, and agriculture. - Kenya: Community land registration and collective farming cooperatives have long histories. - Brazil: The solidarity economy movement encompasses thousands of worker cooperatives, community banks (Banco Palmas), and participatory budgeting processes. - South Korea: The Social Economy Basic Act (2014) and support for social enterprises and cooperatives reflect growing CWB adoption.

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1. Money Flow Map: Track where the money goes when you make your 10 most common purchases. How much stays in your local community? How much exits to distant shareholders?

2. Anchor Institution Audit: Identify the three largest employers in your community that cannot relocate. What do they purchase? From whom? Is there a local alternative?

3. Cooperative Exploration: Research whether there are worker cooperatives, food cooperatives, or credit unions in your area. If so, consider joining or supporting one. If not, research what it would take to start one.

4. The Preston Question: If your local government adopted a CWB strategy tomorrow, what would change? Write a one-page vision of your community five years after adoption.

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- Howard, T., Dubb, S., & Alperovitz, G. (2015). The Cleveland Model: How the Evergreen Cooperatives Are Building Community Wealth. Democracy Collaborative. - CLES. (2019). How We Built Community Wealth in Preston: Achievements and Lessons. Centre for Local Economic Strategies. - Guinan, J. & O'Neill, M. (2019). The Case for Community Wealth Building. Polity Press. - Alperovitz, G. (2013). What Then Must We Do? Straight Talk About the Next American Revolution. Chelsea Green Publishing. - Mondragon Corporation. Annual Reports and Cooperative Principles documentation.