THE Scottish Parliament last week passed legislation that will make it mandatory for public bodies to prioritise the reinvestment of locally-generated wealth back into local communities.
Government agencies, councils, health boards and public corporations will have to buy goods or procure services from regionally-rooted businesses rather than those with little stake in the Scottish economy. Money made in Scotland will have to remain in Scotland, rather than be sucked out by obscure shareholders far away.
In its own wording, the role of the Community Wealth Building (Scotland) Bill will be “facilitating and supporting the generation, circulation and retention of wealth in local and regional economies”.
The bill takes its name from Community Wealth Building – or CWB – an economic development model that originated with the US-based think-do tank The Democracy Collaborative. First articulated in 2005, the approach was created as a tool for economic democratisation, fundamental in building a sustainable political-economic system from the ground up.
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It was inaugurated in Cleveland, Ohio, where it saw the creation of the Evergreen Co-operatives, a network of green industrial enterprises supplying goods and services to the largest local businesses, including the world-renowned Cleveland Clinic.
In England, the model was applied by Preston City Council as part of its revitalisation plan, resulting in a £70 million re-investment from big local entities – also known as anchor institutions – being returned to the community, with 4500 jobs created.
CWB is also being explored or applied by the municipality of Amsterdam in the Netherlands, the Wielkopolska Region in Poland, the state of Victoria in Australia and many others around the globe.
It might look like small fry but the principle of keeping wealth within the communities that create it flies in the face of an economic approach which prioritises profit maximisation over the welfare of people and planet.
Where others have pledged to tackle climate change and growing social inequality by continuing to enforce a top-down, over-extractive economic logic, the Scottish Government has had the courage to try something radically different.
And while it might only be a first step, the bill turns CWB into law that is irreversible without due parliamentary process, rather than being at the mercy of the whims of the government of the day.
Importantly, it switches the mindset and creates a precedent by which the focus shifts from planning for constant growth and external investment to a deeper mission of building resilient recirculating local economies that can deal with whatever challenges the future throws at them in democratic and regenerative ways.
Scotland has set a fresh example for national governments worldwide, loudly stating that CWB should not be limited to municipal or even regional policies. Rather, it is the answer to large-scale economic strategy.
Indeed, as the world deglobalises, only large-scale economic planning, proudly resorting to a very different model than the one followed thus far, will enable us to meet the urgent crises our world is facing.
For this reason, the Scottish Community Wealth Bill is a beacon not just for lawmakers far and wide but for everyone wishing to unlock collective power in communities and workplaces, linking struggles so as to more effectively build an economy that truly serves people, place and planet for the benefit of us all.
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