Economist Gar Alperovitz talks to Buffett about how to create a new system from the ground up.
Peter Buffett and his wife, Jennifer, head up the NoVo Foundation, whose $1 billion endowment was made possible by Peter’s father, famed investor Warren Buffett.Last year, Peter wrote a scathing opinion piece in the New York Times that called out traditional philanthropy for treating symptoms while ignoring the underlying systemic issues. Now that the dust has settled, Peter Buffett sat down with Gar Alperovitz, longtime advocate for a transition to a more just, equitable, and sustainable economic system, for a conversation about hope, change, personal commitment, and community roots.GA: I want to make it a dialogue. I’m not a reporter, but I do want to start with the obvious questions, with the piece you did in the New York Times on the "charitable industrial complex” and the reaction that you received.PB: Well, it’s been fantastic. I was utterly surprised that it mattered that much, what I had to say. And that it mattered that much that I said it. I got a lot of responses like, “Thank god somebody said this, and thank god you said it!”So then I wrote the op-ed thinking, oh, it’ll just be a blog, and when I finished I thought, well, maybe somebody might be interested in this. So when the NYT said yes, I was certainly flattered and excited, but still I had no idea how far it would go. It’s like writing a hit song—you’re just writing a song; you don’t know that it’s going to resonate the way it does. In fact, I say to my musician friends, here I’ve been spending my whole life trying to write a hit song, and it ended up being an op-ed in the NYT!GA: I know you also got a lot of criticism.PB: This is the interesting part. Within the first three to four days, maybe even longer, I received an absolute tsunami, beyond a flood, of support and positive responses—crashed the NoVo website for a couple of days, came in through my info@PeterBuffet.com address, hundreds of hundreds of responses, all positive, 100 percent.And then the people who actually had their own megaphone, inside the system that I was talking about, started responding, and that’s when the negativity began. It came from, essentially, the institutionalized way of thinking. Immediately what I saw was that the people who got the feeling of it, the systemic nature or the overarching sense of what I was trying to put out there as an observation, totally got it. The people who wanted to reduce it—this sentence is wrong, that sentence is shows how nuts he is—were the ones who criticized it. Well, isn’t that the problem? I thought it was interesting seeing the issue once again show itself in who supported and who criticized the piece.GA: That’s really interesting because I thought you were going to answer—but I’m glad you didn’t—that you were mostly attacked. That’s the part I saw.PB: The positive responses are what people didn’t see, because it was email after email personally.GA: Even more important, is the recognition in other’s eyes that one has a voice. A lot of people don’t know that they have a voice.PB: We really feel like that at the foundation as one of the key components for us is to either give people the agency to have a voice, or if they don’t feel like their voice is valid for some reason, to have other voices speak for them to show them that it is. One way or another, we want to create this awareness around your own agency that your voice matters.GA: I’ll tell you my story: I wrote a Ph.D. thesis which turned out to be on the decision to use the atomic bomb. I hadn’t started there. I started with the development of American economic imperialism in 1944-’45, and the planning for the post-war era. And I ran into the fact that people, when the atomic bomb became available, saw it as way to keep the Russians in the corner and enforce their position. This was at Cambridge, and Simon and Schuster decided to publish it.I was 26—I thought, oh, isn’t that nice? And then all of a sudden, I had the same experience you had. It was front page on the New York Times and the Washington Post, but attacked, of course.PB: Of course. Wow.GA: I was like, whoa that’s a different world out there! What’s really interesting about the inside of the system is that even Harry Truman who made this decision actually believed that he was doing good. If you see him as an evil person conspiring, you miss the whole.PB: I don’t particularly subscribe to the idea that there are people out there with their fingers on the triggers, pulleys, levers and buttons, sort of a conspiracy side of things, as much as a system that is running…GA: It’s much deeper than a conspiracy.PB: Right! The thing I love is that nobody’s that smart, nobody’s that together. No politician has it all figured out. That’s not to say that there weren’t bad actors when the engines were starting, for instance during the Industrial revolution. People have gotten the car going off in that direction, but at that point, it’s going. That’s the hardest part about this. We’re inside this system and people absolutely not only believe it’s real, they need to believe it’s real.GA: One of the things I’ve discovered—I’ve been speaking around the country, mainly because of my new book—most people understand that there is a systemic problem. It’s not politics and who you elect; the long-term trends are perfectly clear. It’s not a secret.PB: You’re saying that most people get that it’s systemic.GA: Yes, they get it. Media continues to be all about the Tea Party, and whether Barack Obama made the right move yesterday, and all that stuff. But what’s actually being said across the country is that there is a systemic problem. They voice it in different ways—some people talk about the big corporations, some about the government. But to say that there is a systemic problem is to speak to something people basically know. Lots of people.PB: Yes, you’re right. Exactly. That was what was interesting about the response to the op-ed. These were not just philanthropic people in the NGOs cheering me on. These were people that just got that I was talking about a systemic deal.GA: That’s the challenge. You put that issue in the center. “If you don’t like capitalism, and you don’t want socialism, then what do you want and how do we get there?” It is that level of question.PB: It’s funny, I was talking to someone at KPFK in Los Angeles, on Pacifica radio. He wanted me to go toward revolution and communism, essentially. And I said, look, all those words are charged for various people for various reasons, so I’ll just use the word “awaken.” How about that? How can I get to a word that isn’t charged? That’s a problem with “socialism” in particular.GA: Although, you’ve seen the poll data. People under 30, who will be the creators of the new era, are slightly positive on "socialism," probably because Fox news is against it.PB: Yes, exactly, Fox is probably doing themselves in, and they don’t realize it!GA: But all of this is not manifest; we need to crystallize it somehow. The thing I discovered just going around the country, and particularly this last round, is that there is also a huge amount going on on the ground. But people don’t know that! People do not have the information. So they see the bleak and the dark, and the talking heads. And when you begin to give them information on what’s developing locally all over the place, the most common reaction I get is “Oh! There’s some hope!” In the media, people don’t get that, what they get is stalemate and deadlocked power.PB: Yes, they’re getting what’s fed to them. Maybe the most important thing to us at the foundation is giving people the knowledge that other people are there too. Again, that alone gives them hope.GA: Knowledge, information and also some perspective on how to move forward.PB: It’s about trailblazers. What’s critical is finding like-minded people that maybe have taken one step further than you have, and then you feel safe to taking that step yourself.GA: Yes, it makes it seem possible, that it might be possible. There may be a way forward. But language is important. Half of our time at the Democracy Collaborative is spent on the ground, working on how to democratize ownership of wealth through community building strategies, and the other part is focused on the systemic question: if you don’t like capitalism and you don’t like socialism, then what do you want?My language on this, I’m from Racine, Wisconsin, and my first test, is to think about my very good friend who I go back to see occasionally, who I started kindergarten with. And he’s extremely conservative, very religious and really smart. And last time I saw him, and I talked to him about this. If you don’t have a way to speak to people who are ordinary Americans like the guys I grew up with, you’re not in the game.Let me ask you one more question about this, because I can’t resist. How much of this—as a kid from Racine asking a kid from Omaha—how much of the spirit of this comes from the local Midwestern experience?PB: In some sense, all of it. There’s some fundamental geographical DNA that plays a role in the literal DNA, I think I’m the sixth or seventh generation in Omaha, my great-great-whatever came in in the 1860s and started a grocery store in 1869, that was there for 100 years. That was the family business. My great-great-grandfather, I joke about this, his name was Earnest and his brother’s name was Frank. And their sister’s name was Grace! But talk about a work ethic!My mother lived two blocks from where she grew up and where I was born. So in other words, I would go see my grandparents all the time—they were two blocks away. And I had the same English teacher my mother had in high school, and it just goes on and on. It was a community. This essentially could happen anywhere, but it feels very Midwestern.GA: It’s a small enough city that you could have that feeling of community. Where I’m from the size of the town is smaller, about 80,000. I’ll probably romanticize this, but looking back, let me tell you how it was. The truth of it was, the zoo didn’t have an elephant and they wanted an elephant. (It’s a whole other question whether that’s a good thing.) So they put up a paper-mâché elephant with a slot in it, people would drop their pennies in, and ultimately, step by step, they got an elephant. They could actually count on the community.I have this image, and I remember reading this story, where they’re training young firemen, and they have to learn to go into the fire and then come out the other end. They are one thing at the outset, and frightened. And they come out the other end as a fireman once they’ve actually faced it and done it. What I hear you doing is embracing Warren Buffett’s son, and coming out the other end, using it.PB: Yes, absolutely. That’s exactly right.GA: Wonderful. Did you have any hesitation about doing this?PB: No, and I’ll tell you why. I got it from my parents, and my nature, too. It takes both. We grew up not having any idea what my dad did.GA: You really didn’t know?PB: We really didn’t know. When my sister was in grade school and she had to list our father’s occupation, she put security analyst. Everybody thought he checked alarm systems. He’d read the paper every night in the same place, going through S&P 500s, Moody’s, huge bulletins, but we had no idea. Honestly, we rented the same house in Laguna Beach for the summer for 10 years, over 10 years, and then they finally bought a house. So we had a second home when I was 13 or 14, and that was a big deal. And that was a $125,000 house on the beach, it wasn’t a $4 million house or whatever.So there were little things that were a little different, but nothing that was wildly different than anybody in the neighborhood. We didn’t have any sense of that. When I was in my 20s, in the ’80s, he showed up on some richest person list, it might’ve been when Forbes started doing it. And my mom and I were on the phone laughing saying, wow, now everybody is going to start looking at us differently, even though we’re still the same. But being in Milwaukee and being a musician, it was actually not a thing because my friends were painters, house painters, and musicians. We never got a ton of feedback one way or the other.But when Jennifer and I moved here to New York City in 2005, I called my dad and said, this is weird. This is the first time I felt like the name is doing things to people. My wife calls it the funhouse mirror. And he hadn’t thought of it, my dad was like, oh, yeah, this is kind of like you’re a Rockefeller or something in NY. I mean, none of us think that way, and he hadn’t either. In the past decade or so, he’s been really way more public. And so now, of course, he walks down the street and people recognize him and are excited to see him—and he deserves it. He’s worked his tail off for years and years and years.But when I was growing up, it was never a factor; when it started to become one, I was already fully formed, essentially, or certainly formed enough, because I’ll never be fully formed. I was formed enough to be able to recognize that it could be a tool. How am I going to use this thing? It’s worth using, and it’s stupid to run away from it. Why live in anything other than a positive relationship to it? How do I work with this? It’s been spectacular, trying to figure this out, especially after this op-ed because that opened up so many things, and I want to be careful.GA: That’s a whole different public life. It’s not only music.PB: Exactly right, and the foundation is of course a big part of this because it has enough assets to potentially shift things. What do we do with that? How do we behave? We knew from the minute we got the money that our behavior is as important as the money. Luckily Jennifer and I have been together for 22 years, and we have worked through our personal relationship stuff. However you want to say it, we are learning so much about being in a relationship to each other that that can only begin to reflected out into the larger world. We’re rooted individually and together, and what I’ve learned, ultimately, is the whole "be the change" thing is way more complicated than people think. People think it’s do the change you want to see in the world. Being is so much harder, but you get so much back for doing it. I don’t want to use the word ‘work’ because it’s not work, it’s this wonderful place of discovery. It literally grounds you. And I am literally barefoot all of the time. That’s no joke. I’m convinced that being in nature, eating from the land you live on, drinking water from the land you live on, all these things are things that we’ve experienced for millennia, and have only been separated from at most 150 years, Are essential. Whatever the next thing is, it has to have that as a component. A deep local commitment.GA: I was just thinking this about it the other day talking with my wife (we’re in our 41st year). I went to William Horlick High in Racine, WI, and my friends, going to public school, were blue-collar and farm kids—I could walk from our house easily in five minutes to a farm to get fresh food. That’s gone now from Racine, it’s changed. But we had that possibility, to connect to the land, to meet people of different backgrounds….PB: Public education is a huge part of that. My education was public from all the way through kindergarten through high school, and you’re right, you meet everybody there.GA: But it wasn’t a question. It’s just the way it was.PB: It’s community. Our grandparents didn’t call it organic food, right?GA: What about the larger ecological piece—climate change? Where does that come in for you?PB: Well, to me, it gets into the stopping the bleeding part when there’s a systemic nature of the wound. Climate change falls into the category of critical. It’s another piece of the systemic problem. I don’t put it in a different category than violence against women, economic inequality, or all the things that create the other layers of injustice, except that it’s an injustice against the planet, which is probably the deepest. In NoVo, we aren’t specifically addressing climate issues, but that doesn’t mean we don’t think it’s important.GA: To say that it is a systemic problem, rather than a technological problem, changes the debate.PB: I have friends who are so passionate about doing all this stuff around climate change, but it’s like the Affordable Care Act. These things are big deals, but let’s remember the Einstein quote, “The significant problems we face cannot be solved by the same level of thinking that created them.” All this carbon sequestering, people talking about burying CO2 under the ocean: you have to be kidding me. Which generation is going to pay for that?GA: It’s really interesting, to focus it that way: it’s not the way the movements are currently engaged. They are trying for piecemeal legislation and they come up against the fact that it is really the system that needs changing. We better get an alternative, and that shifts the conversation.PB: I think some of the problem gets back to the question of hope. I think it’s beautiful to see some of the people who are so passionate about this cause, but then you say, actually that’s not going to work, you need to change the system.GA: And they say, well how do I change that?PB: Exactly, then they say, well, that’ll never happen, so what do I do?We’re talking about people who have a lot of influence and you would think the kind of the imagination to admit, you know what, you’re right, let’s go! I’m struck by the way ego stops this from happening. You know, someone has a cause, it’s their cause, they’re going to fight for it: to say to them, you know what, actually, it doesn’t matter unless you tackle the big picture. Nobody wants to hear that.GA: But they know. And if it’s a system problem, we better figure what’s the alternative, at least have some ideas about it. We better have some starting points. I use the term evolutionary reconstruction. Which means you need to reconstruct institutions, and reform doesn’t get you there.PB: That’s the thing. I’m so with you on that. Reform is giving energy to the existing problem, ultimately.GA: And revolution, typically, doesn’t get you there either. Either you’re going to find a way, over time, to change the institutional structure and the patterns in culture that reinforce it, or you are stuck. This might be possible, it might not be, but what’s interesting is that once people understand it they begin to have a path.PB: They have to. They absolutely do. And that’s the hard part; I think of it as a lilypad—people need something to jump to, otherwise they’re not going to jump. I found that in my own career as a musician, I was doing commercials commercials commercials, and I felt comfortable, safe, and it took seeing something I could jump to, that was built strong enough, to make the leap.We feel that it’s our responsibility to start building the scaffolding—creating the conditions so that something can be built. We don’t need to be saying that this is exactly what it should be. But we obviously have to have enough of an inkling about what we think it could be, but not be attached to the exact outcome.I joke about it, that we’re trying to use money as if money doesn’t matter. But that’s the trick, you have to use the existing structure so that the existing structure can go away. And this plays out differently in certain sectors, you can imagine alternatives easier in some than others. There are certain things—politics, the economic structure—people can’t imagine another way.The idea is that you can start to give people agency—that’s where the Internet can help—and then knitting these people together. You can, I’m sure, cite more local examples than I can, time-dollars and these various things. In fact, there’s a bank in New England that’s going to start lending local currency, which I think is so interesting. I think the key is small, local transformation that then gets knitted together. In a different vein, we’re working with Ai-Jen Po on domestic worker union rights, and she’s really helped me see a similar process, knitting together migrant workers, service workers, domestic workers, Walmart employees— there’s various constituencies that all are starting to feel that they are not alone.GA: That’s critical, not feeling alone is politically critical.PB: It’s huge! You need to start with extremely small and manageable, extremely bite size chunks of change that you can turn into a meal. Honestly, I think the country is too big anyway. I’ve always had this feeling that bioregions, in particular, would be a way people naturally have and can organize themselves around. And that the country could go in this direction, probably over 100 years, 20 years, 400 years? I don’t know how long it’s going to take.GA: I’m smiling because I have argued the same thing for a long time: a continental system is too big to manage democratically. Is participatory democracy possible with 318 million people? I don’t think so.PB: No, exactly. And that’s okay.GA: It means that there’s a whole radical shift in constitutional structures that’s necessary if you want a democratic system. There are a few places I see beginning glimmerings of this regional notion. In the Pacific Northwest, there’s a lot of discussion of regional issues, and then in New England, there is a growing effort to focus on air quality and climate change, on energy, and on food as region wide concerns.PB: Exactly. And again, a bioregion just makes sense. I don’t know if you’re familiar with Ecotrustand Salmon Nation. That is visionary.GA: Actually, if you go back to the 1930s and the early vision of the TVA (not what it became in WW2) what it was was a river system. That’s what they were trying to manage.But regional scale is an argument that people have the hardest time with; when I talk about this question, and I say, no this doesn’t make sense, at some point this country is too big to manage. That’s very hard for people to get their heads around. At some point, you’re talking about scaling down the system, or it doesn’t solve the problem. That’s really tough. “Capitalism” is easy to talk about compared with actually thinking about regional scale decision-making of a genuinely serious kind.PB: Yes, which is strange to me because history is definitely on our side when you’re talking about localism. The nation-state is a new idea and it’s an idea. Wednesday: just an idea. America: just an idea. You have to remember that.GA: I spend most of my time these days writing books. It’s all about ideas. And I often say, I don’t think ideas matter at all, most of the time. Except sometimes they do…and then they can matter to people a very great deal.I think this is the first time in my adult life—including the ’60s—and as a historian I would say, I think it may be the first time in American history where we are truly up against systemic limits and the systemic issues are really on the table. The Great Depression was nothing compared with the political-economic and ecological limits now challenging the system. And this makes it a really important time.PB: And wars can’t take us out of it, which is what happened both with WWI and WWII.GA: That’s absolutely critical. The war option is declining as an option to bail out the system. I agree entirely. And the traditional liberal solution, for better or worse, is not available largely because of the collapse of the labor movement, which was the heart of its power base.PB: And that’s why knitting together the workers in a way that we hope we can help do is valuable.GA: And this then points to the evolution towards a different system. That is really what we are talking about and that’s when ideas matter; it’s not just projects. I put it like this sometimes: I am really for projects. But I’m totally against “projectism,” the idea that my project is better than your project and so on.PB: Exactly, and this is, again, part of the problem. We have so successfully individualized people that they don’t get this necessity for social interaction and working together and moving together. And I think part of it is the origin of species: the piece of that story that got amplified was essentially every man for himself, survival of the fittest. When in fact, my understanding is that most of that story was the communal nature of the animal kingdom, which we’re a part of.But the industrial revolution amplified the piece that mattered to them. I find that whole period so interesting. Have you read Looking Backward? I just read this after someone reacting to the op-ed suggested I should. It’s amazing and it speaks to that time where a book mattered. What that book launched is pretty extraordinary. And I do think it was only WWI that stopped, not only the momentum of the book, but the thinking of the time.GA: The socialists and all of that early movement were especially interesting because when it came down to earth it was community socialism. Municipal socialism, like in Milwaukee. But it was community-based, it was not just state socialism.PB: And these nationalist clubs that started spawning up all over, and it gets back to projects versus projectism, because it’s people recognizing the similarities of what they’re doing, even though it might be different for their particular locale.GA: We have to have the chutzpah to imagine and declare that this period of history could be the pre-history of the next great transformation.PB: And that’s exciting to people. As opposed to scaring people.GA: And we need to discuss it openly. Say that it’s a system problem and it’s capitalism. Working for the next three or four decades laying groundwork for transformation becomes meaningful if people acknowledge and embrace the first proposition.PB: What’s encouraging is that we are at a point where if you say the problem is capitalism, you don’t get branded something. All you’re doing is saying—and this is what the op-ed was about— that from the place that I sit, this is what I’m seeing. Saying that doesn’t make me something else; it just makes me an observer of the state we’re in, let’s all work towards something else. But I’m not going to brand myself some brand from the past that will serve to demonize me or put me outside the circle in someway. And that’s the trick, because the system wants us to do that.GA: Absolutely. We just held the first meeting for something we’re calling the “Next System Project” this past Thursday. We had 18 people in the room, including the president of the American Political Science Association, who just finished her term, and the president of the Academy of Management, that’s 19,000 business school professors, along with others, professors, activists, and so on. The issue we were discussing was: if we are facing a systemic problem, how do we put that on the table and how do we talk about it seriously? Every single person in that room, hands down, said it was a system problem, not a political problem. Not a social problem. Isn’t that interesting? We were surprised at the unanimity and clarity; it was striking just how enthused everyone was about tackling the question at the level of the system.PB: I will say that, to me, that’s probably Obama’s greatest gift: he’s shown that nothing that stays within our current system is going to work. He really did that for all of us.GA: I think we’ve been in some sense dropping the ball. People understand more than we have been saying. Particularly when the rhetoric is dropped.PB: That gets back to the needing to knit together. And I think that’s happening. I loved that the most searched words in Merriam-Webster was capitalism and socialism. These are the kind of things we can measure now—technology will be extremely valuable in terms of saying that this is undeniable and here’s why.GA: We need to make this shift manifest to people. This is a different time in history, and this is really the moment. People are beginning to adopt a frame that the next two to three decades count and that we need to be thinking in terms of movement-building, project-building and idea-building. I think of it as the pre-history of the next great shift. National People’s Action is talking about a 40 year plan; BALLE, who we both work with, is talking about a generation of work. You know the progressive era—it took this long, but if you can get rolling, things can really change, and that’s what we’re talking about. The way I sometimes put it, and it drives some people crazy, is well, you want to play this game? The chips are a few decades of your life. That’s what it’s about.PB: I tell staff here, we’ll probably be dead when the things we’re working on actually come to fruition, and that’s okay. We want to see indicators, but don’t count on being at the party.GA: I’m going to give you two numbers that really resonate in my experience. In the talks that I’ve been giving, the one that really floors people is that 400 people in the US have more wealth than the bottom 180 million. I used to say that this was literally medieval, but I don’t anymore because a medieval historian came up to me and told me it was never that bad in the medieval period.PB: Oh my god.GA: It’s a staggering number.PB: And in a global context, it’s even more staggering.GA: But it also points towards one of the things any serious alternative systemic design will need to address. The other number emerges when I tell people that we don’t have any economic problems, and they say what are you talking about? And I explain that the current American economy today produces roughly $200,000 for every family of four right now. We don’t have an economic problem, we have a political problem managing the wealthiest economy in the world. If we were at full-employment, it’d be closer to $250,000. Or—I then say—$100,000/year with a 20-hour week.That opens one’s eyes. About equality and inequality, and the distribution of work and work time.PB: And the framework around “deserving” and welfare, all those claims that if people just wanted to work, they could. That stuff drives me crazy.GA: The technical term for that is "bullshit."PB: Another number: how small Occupy was in terms of constituency, 250,000 people at its peak. And think about how nervous just that many made a whole lot of people.GA: And that’s just openers.PB: We’re talking just 1 or 2 percent of the population, to really get something going. To build that movement, you need to give people a sense that there are thousands and thousands of people out there working for the same things; you need to give them a sense that they’re not alone.GA: And that there may be a path. There may be a direction. There may be a different system out there if we build it.
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