John Lamparski/SIPA USA via AP Images
Demonstrators representing climate and racial issues march, September 20, 2020, in New York City.
This article is part of the Prospect roundtable on the case for a new large source of public capital.
The movements that helped deliver Joe Biden’s election victory are not resting on their laurels. They are now working overtime to deliver a bold economic agenda under a Biden presidency, including the creation of a new institution to catalyze economic renewal.
The need for this institution pulses through the very air we breathe. With each inhale of smoke from wildfires, of tear gas during a Black-led uprising, of stress from chronic unemployment, millions of people are calling for solutions as big and interconnected as our problems. These problems did not begin with Donald Trump, and they will not end with his ouster. As we turn to the post-Trump era, we need a new national investment institution to strategically channel trillions of dollars toward building an economy that prioritizes racial, economic, and environmental justice.
To get there, we must follow the lead of the workers and communities who are most impacted.
We mean this in two senses. First, the policy. Getting the solutions right requires listening to those who know the problems most intimately. Those on the front lines of climate change, mass unemployment, a pandemic, and racial injustice are best positioned to guide an institution dedicated to tackling these very crises. While we all say we want “equity,” if impacted groups aren’t at the center of a new institution, it’ll be a definition of equity by and for elites.
Second, the politics. Movements are essential not only to get this right, but to get this done. We will win the fight to create such a transformative institution only if movement groups that represent frontline workers and communities—including unions, racial-justice organizations, and climate and environmental-justice groups—are pushing for it. Cross-movement backing for a new institution is critical to getting this bold idea across the finish line in Congress.
Over 250 of the nation’s largest union, racial-justice, climate, and other grassroots groups joined forces in September with over 100 members of Congress to urge the creation of a new institution as part of the THRIVE Agenda. THRIVE offers a bold and cohesive economic-renewal plan—backed by a movement of movements and a strong majority of voters—to put 16 million people back to work building an economy that fosters justice, not crisis. This plan, spelled out in a new congressional resolution, calls for “creating new public institutions, inspired by and improving upon New Deal-era institutions, to ensure universal access to critical resources and to strategically and coherently mobilize and channel investments … at the scale and pace that these times require.”
As Saule Omarova has rightly argued, the U.S. federal government lacks an institutional home for democratically crafting a coherent, long-term strategy for economic development. This institutional gap leaves public-investment decisions to be made on the short time frame and small scale of a congressional appropriations cycle. The resulting investment programs are scattered in silos across federal agencies, often invisible and inaccessible to the people they are meant to serve. The absence of a well-defined, long-term public investment strategy also makes it difficult to lure private capital away from counterproductive investments—like real estate speculation—and toward broadly shared objectives. To solve these problems, increased public investment, financial regulation, and Federal Reserve reform are necessary and urgent—but they are not sufficient.
The solution is clear to scholars and movement leaders alike: We need to create a national investment institution to achieve the scale, coherence, and long-term vision required to implement an investment strategy that achieves public-interest goals.
But whether such an institution will serve the public interest or simply exacerbate existing inequities depends entirely on whether the public has the power to shape it—particularly the workers and communities who have spent decades crafting alternatives to the unjust status quo. In the language of the THRIVE Agenda, a new institution needs “democratic governance and accountability to correct the systemic misallocation of resources and representation.” To realize this power shift, three elements of the institution’s design will prove critical.
First, the institution’s statutory mandate—its legally binding, long-term goals—should be shaped by representatives of communities impacted by chronic underinvestment, including unions, Indigenous groups, and racial- and environmental-justice organizations. With firsthand authority on our nation’s most glaring investment needs, these actors are well positioned to precisely identify institutional goals to tackle poverty, unemployment, the climate crisis, toxic pollution, and racial, economic, and gender inequity. To ensure democratic accountability, these statutory objectives should be paired with equitably designed and transparent metrics of progress that enable public evaluation and oversight.
Getting the solutions right requires listening to those who know the problems most intimately.
Second, equitable representation in the institution’s design should translate into equitable decision-making power in the institution itself. Representatives of impacted communities must compose a large majority of the institution’s governing board. This is essential to get the investment priorities right. There may be a thousand interpretations of the specific investments needed to achieve goals like eliminating toxic pollution, but the one that matters most comes from the communities suffering from asthma, cancer, and lead poisoning caused by such pollution. While impacted stakeholders are typically relegated to advisory committees with no teeth, such tokenizing risks ceding the real power to Wall Street executives who are qualified to reinforce the economic status quo, not deliver economic renewal. If a national investment institution is to reverse long-standing inequities, so must its governing body.
Third, to qualify for funds channeled through the institution, applicants should be required to meet clear labor, environmental, and equity criteria, as defined by the same movement actors. Unions have long advocated for prevailing wage floors, neutrality toward collective bargaining, worker safety rules, “Buy American,” and other labor standards—all of which should govern new investments so as to build worker power, curb outsourcing, and secure family-supporting wages. Similarly, environmental standards advanced by climate and environmental-justice groups should be applied to cut emissions and help communities shield themselves from climate disasters. For example, standards like “Buy Clean” should be used to drive investment toward clean factories with low emissions and high wages. To serve as a down payment on a more just society, the investments also should conform to equity standards generated by racial-, gender, and economic-justice groups. The THRIVE Agenda, for example, calls for directing “at least 40 percent of investments to communities that have been excluded, oppressed, and harmed by racist and unjust practices.”
Movement actors are central not only to the design of a new institution’s structure, but its specific investment priorities as well. Much of the work to identify those investments has already been done. The Movement for Black Lives, for example, has specified investments to support Black ownership of businesses, land, and wealth. Unions and environmental groups in the BlueGreen Alliance have detailed investments to create good union jobs by building clean and affordable public transit, replacing lead pipes, expanding wind and solar power, upgrading our buildings, and boosting manufacturing of clean technologies.
Environmental-justice groups, meanwhile, have laid out specific investments to eliminate toxic pollution and remediate the health impacts of long-standing environmental racism. Communities on the front lines of the climate crisis have formed a United Frontline Table to call for bold investments in a “regenerative economy,” covering everything from energy democracy to food sovereignty. And over 100 Gulf South groups have led the nation in crafting regional solutions by uniting behind a Gulf South for a Green New Deal platform that urges land reparations, sustainable fisheries, and other locally rooted investments.
Movement actors are central not only to the design of a new institution’s structure, but its specific investment priorities as well.
Recent economic analysis shows that these concrete, movement-backed proposals would create millions of family-sustaining jobs—enough to end the unemployment crisis. They simultaneously would slash pollution and build climate resilience, with benefits going first and foremost to Black, Brown, Indigenous, and working-class communities. Together, they form an institutional blueprint for investing in racial, economic, and environmental justice—the building blocks of economic renewal.
In addition to building a new investment institution’s to-do list, movement groups also are building the power needed to win that institution’s enactment. Union, racial-justice, climate, and other grassroots groups flexed that power this fall by garnering vocal commitments from congressional leaders to advance the THRIVE Agenda. During the launch of THRIVE, Senate Minority Leader Chuck Schumer pledged that “passing a just economic renewal bill following the principles of THRIVE” would be a “top priority” of a 2021 governing agenda. Just as cross-movement unity earned that pledge, movement power also will be required to push Congress to honor it.
As hurricanes and wildfires ravage our communities, and millions suffer from COVID-19, unemployment, and the systemic racism that feeds these crises, the need for economic renewal is as undeniable as the post-election opportunity to achieve it. Those who live and breathe these realities are essential to the design of a new institution to guide the renewal—both to get it right and to get it enacted. The same movements that delivered the eight-hour workday, the Civil Rights Act, and the Clean Air Act are well poised to deliver the next generational step toward a more just economy.
