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Community capitalism is an approach to capitalism that places a priority on the well-being and sustainability of the entire community, not just the lucky few. The community could be a metropolitan area, region, or an entire country. Other terms for community capitalism include 'sustainable capitalism', 'stakeholder capitalism', and 'family capitalism'.
In 1997 The American Assembly published a report titled "Community Capitalism: Rediscovering the Markets of America's Urban Neighborhoods", which they distributed to business leaders, President Clinton, cabinet members, members of Congress and governors, and the general public.
In 2013 George R. Tyler published the book What Went Wrong: How the 1% Hijacked the American Middle Class . . . and What Other Countries Got Right, which describes the 'Community Capitalism' models (which he terms Family Capitalism) used by countries that have helped their citizens to prosper, despite the forces of globalization. He contrasts the experience of the U.S. over the past 30 years to that of Australia and the major nations of northern Europe (Austria, Belgium, Denmark, France, Germany, Holland and Sweden).
In the United States, there is a growing awareness by citizens across the political spectrum that the Laissez-faire model of capitalism is fundamentally flawed. By reframing the debate around how we can leverage the positive aspects of capitalism to strengthen our communities, the hope is that the country can move beyond partisan politics and towards a collective plan of action.
Community capitalism is the long-term strategy for economic growth of Kalamazoo, Michigan. The system uses focused and organized philanthropy and business investment occurring simultaneously. It focuses community resources into five key areas: place, capital, infrastructure, talent and education. The strategy holds that, in order for a community to be economically viable, it must address all five areas simultaneously.
History in Kalamazoo
After a long period of corporate downsizings and results of mergers and acquisitions (most notably by Upjohn/Pharmacia/Pfizer, General Motors, First of America/National City and the paper industry), the Kalamazoo region went about changing the face of its downtown. It set up one of the nation’s only community-based venture funds; establishing the "Southwest Michigan First Life Science Fund"; refurbishing a 2,200,000-square-foot (200,000 m2) abandoned automotive stamping plant; building a 58,000-square-foot (5,400 m2) life science accelerator; embracing the concept of talent-driven organizations; and funding the world-renowned Kalamazoo Promise scholarship program. The community has since seen resurgence in job creation and overall economic growth.
The term 'community capitalism' was used by Fast Company magazine in naming Kalamazoo in its "Fast 50" list in 2007.
E2M economic model
The E2M model of community capitalism and community conscious capitalism was first described on January 1, 2000 by Michael Garjian in a document titled E2M: An Economic Model for Millennium 2000. It was documented in the following:
- A letter to Garjian from the Department of Commercial Ventures and Intellectual Property at the University of Massachusetts, Amherst on August 16, 2000
- A letter from Massachusetts Congressman John W. Olver to the Ford Foundation on March 1, 2001
- A letter to Garjian from the Ford Foundation on April 3, 2001
- A letter to Garjian from Hampshire College President Greg Prince on August 20, 2001
The E2M model of community capitalism was further described in detail to Terry Mollner of the Social Venture Network who was invited by Garjian to a private meeting of the E2M Board of Directors on March 26, 2001. Mollner was the featured speaker at Garjian’s invitation at the Western Massachusetts Venture Forum at American International College on March 27, 2001 where E2M was discussed privately to a selected group.
A second private forum was held at the home of Hampshire College President Greg Prince on December 11, 2001 for selected community leaders including representatives from the Social Venture Network, Businesses for Social Responsibility, Mass Ventures, local entrepreneurs, government leaders, investment advisors, and citizens. A number of additional forums discussing E2M community capitalism were held at Hampshire College, March 26, 2002, the University of Massachusetts in 2003, the Boston Social Forum on July 24, 2004, and in private meetings over several years.
Newspaper articles documenting, but not detailing, E2M Community Capitalism are listed below under 'Further reading'
A provisional patent application for the E2M model of community capitalism was first filed with the US Patent Office on February 6, 2001 with subsequent full applications filed on November 21, 2003 and November 11, 2008.
Newspaper articles describing E2M Community Capitalism:
- Daily Hampshire Gazette, June 13, 2001 Page D5
- Daily Hampshire Gazette, December 12, 2001 Page C1
- The Journal Magazine, February 21, 2002, V27 #17, Page 13
- The Daily Collegian, December 11, 2002, V109 #67, P4
- Hampshire Life Magazine, December 20, 2002, Page 31
- The Daily Collegian, April 9, 2003, V109 #114, P3
- Springfield Republican, December 6, 2004, Campus Notes
- Springfield Sunday Republican, April 17, 2005
- BusinessWest Magazine, April 30, 2007, P 34-35
- USA Today, July 2, 2008, Mary Beth Marklein, Free-college programs multiply and Heightening a 'sense of hope'
Books and Journals describing E2M Community Capitalism include:
- Ron Kitchens, Dan Gross, and Heather Smith. Community Capitalism: Lessons from Kalamazoo and Beyond.
- Gibson-Graham, J.K. (2006). A Postcapitalist Politics. University of Minnesota Press. pp. xx. ISBN 0-8166-4804-2.
- Krause, Elizabeth L (February 2005). Michelle Bigenho and Daniel Goldenstein. ed. "In Search of Community Conscious Capitalism". Association for Political and Legal Anthropology.
- Michael Garjian. (2010). The Community Age
- Michael Garjian. (2016). "Community Capitalism:How Communities can use Capitalism to Create a Shared Economy that Works for Everyone
- In Search of Community Conscious Capitalism
- Community Capitalism (E2M)
- Fast Company, March 2007
- Wall Street Journal, July 28, 2008, Jeff Bennett, Class Act, Kalamazoo's lesson: Educate and they will come
- Lessons from Kalamazoo
- How Communities can use Capitalism to Create a Shared Economy that Works for Everyone