Education Debt & Structural Racism: Public Bank-Worker Cooperative Solutions

[eridani]

http://www.publicbankinginstitute.org/education_debt_structural_racism_public_bank_worker_cooperative_solutions

All of this raises obvious issues about the role of public finance--like public banks, development banks, and the extension of public credit, in structural remedies for historical, material imbalances--on top of categorical debt forgiveness. Development banks for cooperatives might be a good place to start. Here, the model of the Southern Reparations Loan Fund, a part of the Southern Grassroots Economies Project, might be combined with public banking.

The Southern Reparations Loan Fund (SRLF), a project of the Southern Grassroots Economies Project (SGEP), makes business loans to cooperatively owned businesses anchored in the most marginalized Southern communities. We especially focus our lending toward start-ups and expansions of democratically governed enterprises that meet the needs and elevate the quality of life of African Americans, immigrants, and poor whites. Our goal is to nurture the development of businesses that maximize community benefit, rather than the narrow concept of maximizing profit. The concept of reparations is at the heart of SRLF’s mission: SRLF moves capital stemming from an economy rooted in extraction, exploitation, slavery, and land grabs to build Southern enterprises that are owned and democratically controlled by the very communities from which the wealth was stolen in the first place.

As part of of our commitment to the most marginalized communities, we target our lending to projects that other lenders might consider “un-bankable,” because they are too small, not adequately collateralized, or, though profitable, not “profitable enough.” Operating from a principle of “radical inclusivity,” SRLF is interested in projects that are based on sound business ideas that meet real community needs, businesses built by people who know how to work together to get good things accomplished—regardless of their individual “credit-worthiness.” If SRLF does its job according to its mission, the vast majority of our loans will go to poor people who have a direct personal and community-wide stake in building an inclusive economy that is democratic, just, and sustainable.

. . . SRLF moves capital stemming from an economy rooted in extraction, exploitation, slavery, and land grabs to build Southern enterprises that are owned and democratically controlled by the very communities from which the wealth was stolen in the first place.

While the loan fund works with businesses "to mitigate the risk associated with lending to non-traditional borrowers," there is no doubt the model would work harmoniously with a state-owned, BND-style bank, or a more specific public development bank. Contrast a vision like that with a partially remedial student debt relief package.

Among current presidential candidates, nominee Jill Stein of the Green Party supports public banks, while Senator Bernie Sanders has crafted specific legislation supporting worker-owned businesses with "enterprise banks." But further work needs to be done connecting the model of the SRLF with the public banking movement in general. The idea would be to create public banks with chartered or administrative mandates to finance such cooperative projects, possibly partnering with community banks, so that non-banking private businesses wouldn't need to be the arbiters of how to deal with "unbankable" or "unlendable" groups, and the uncertainty and dependency of philanthropy would be replaced by the structural implementation of transparent, responsible community financing of sustainable enterprises in disadvantaged (and in all) communities.