The 99 Percent Economy

In his new book, Professor Paul Adler suggests we try democratic socialism...or else

November 04, 2019

Paul Adler doesn’t mince words when he discusses the demise of our natural environment. “We are already over the climate-change cliff,” he writes. “We need to find a way to mobilize a massive, sustained green R&D effort and drive the resulting new technologies into widespread use and abandon many economic assets that are environmentally unsustainable and get us all to change our living habits…and achieve all this in time to avert the collapse of ecological and social systems.”

Adler has been focused on the impact of climate change for many years, systematically evaluating its implications as an expert in organizational theory. “In my scholarly work, I explore the insights organizational theory can offer in helping us address society’s biggest problems,” said Adler, Harold Quinton Chair of Business Policy, Professor of Management and Organization, Sociology and Environmental Studies at USC Marshall.

One of these big problems is climate change. Adler forecasts that within two decades, the social landscape will shift. “There will be wars over resources, land lost to oceans, migrants in flight,” he said. “How are we going to deal with that?”

“We need radical change to the way the economy is structured." — Paul Adler, Professor of Management and Organization

Now Adler has written a book about it. In his new work, The 99 Percent Economy: How Democratic Socialism Can Overcome the Crisis of Capitalism, he suggests that our capitalist economic system is at the root of the climate change problem, and the only way to save the environment is to move beyond capitalism to socialism.

“We need radical change to the way the economy is structured,” he argues. “If we are to avoid the worst of the looming climate disaster, we need to make deep, rapid changes that will threaten the profits and very survival of vast swaths of industry—not only the fossil fuel industry, but all the industries that use fossil fuels or otherwise add to our emissions, such as agriculture, transportation, mining, lumber, construction, and consumer products. While there are a few industries that would find this transition profitable, such as solar energy, they represent a tiny minority.”

Faced with this conundrum, Adler proposes a democratic form of socialism. “This will allow us to work together to meet the climate challenge,” he said. “If we want to preserve any semblance of civilization as we know it, we have no choice but to engage a World War II-style economic mobilization to rebuild most of the products, processes, and infrastructure of our industry and agriculture. And whether we like it or not, there is no way to do that without socializing the ownership of most of our society’s resources.”

Adler knows his idea is, “not the kind of thing business school scholars usually advocate,” he said. “I just can’t see how we survive this climate emergency without moving to a form of socialism that’s even more radical than [presidential candidate] Bernie Sanders.”

In his book, Adler acknowledges the great contributions to economic growth and human wellbeing that capitalism has brought. But he argues the costs of this system are growing faster than its benefits, and the climate change process has brought this to a crisis point. He also acknowledges the “abject failures” of 20th century, authoritarian socialism. But he sees hope for a democratic form of socialism – even if no country has ever adopted such a system

The Business Solution

According to Adler, if we want a model of what democratic socialism might look like, we can find it in a strange place – within many of our largest corporations. “Most corporations,” he says, “function like islands of planning. Most CEOs do not let their business units operate like entirely autonomous businesses that compete within the corporation for investment funds from headquarters. Instead, in most corporations, business unit plans are coordinated in a strategic planning process so that the corporation can benefit from synergies and from coordinated action towards their common goals. And in some of these corporations, this planning is highly participative – actively involving middle managers and sometimes even front-line personnel in developing the organization’s goals and the plans for achieving those goals. If we socialized the ownership of our productive resources, we could strengthen the democratic quality of that enterprise-level governance – by eliminating the veto power enjoyed today by investors – and we could use these same strategic planning processes to democratically determine the goals of entire industries and indeed the entire economy.”

Adler admits a planned economy might fail. “People have good reason to be concerned,” he said. “But these practices give us a working model that’s proven its effectiveness. If we put industry under public control, we could create an economy that was democratically governed, innovative, and efficient. Democratic socialism would allow us to work together to meet the climate challenge. On the other hand, maintaining our capitalist system ensures the collapse of our natural environment...and of human civilization.”

The 99 Percent Economy: How Democratic Socialism Can Overcome the Crisis of Capitalism was released by Oxford University Press in October 2019.