Community Economic Development as Progressive Politics: Toward a Grassroots Movement for Economic Justice

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INTRODUCTION

During the unprecedented surge of 1990s prosperity, community economic development (CED) emerged as the dominant approach to poverty alleviation, touted by politicians as a market-based alternative to outdated welfare policies and championed by civil rights leaders as a critical link to economic equality. (1) At a time of dizzying wealth accumulation, declining welfare rolls, and burgeoning budget surpluses, a consensus formed around the idea that market-based CED programs were necessary to revitalize the lingering pockets of poverty that blotted an otherwise vibrant economic landscape. Espoused by advocates of different ideological stripes, (2) the simple logic of market-based CED--that increasing for-profit initiatives in geographically discrete low-income neighborhoods could produce economic transformation (3) and community empowerment (4)--became an antipoverty axiom.

Over the past decade, the ascendance of market-based CED has fundamentally shaped the development of social policy, community-based practice, and legal advocacy. (5) At the national policy level, a private sector approach has defined the federal government's response to poverty issues, as support programs have yielded to market-based antipoverty initiatives, such as the Empowerment Zone Program and the New Markets Tax Credit. This federal agenda has been augmented by state and local efforts to adopt market-based programs to stimulate investment and business activity in low-income neighborhoods. (6)

Against this policy backdrop, CED professionals working to implement revitalization programs on the ground have also embraced a private sector model, reconfiguring low-income communities as underutilized markets with rich economic opportunities for businesses. (7) According to this model, effective CED involves identifying the competitive advantages of conducting business in inner city areas (8) and structuring the proper incentives to lure reluctant enterprises into neglected markets. (9) Advocates of this approach have therefore suggested that distressed communities revalue and promote indigenous assets such as public transportation and proximity to existing commercial centers. (10) Once these assets are identified and properly packaged for outside investors, (11) private sector capital can be channeled to poor neighborhoods through innovative financial tools, (12) bringing with it stable jobs and needed services. (13)

In response to this privatization of social policy and community action, poverty lawyers have increasingly incorporated market techniques into their antipoverty arsenals, altering the terrain of legal services delivery. In an effort to improve the physical infrastructure and strengthen the economic fabric of distressed communities, practitioners have provided transactional legal assistance in the areas of real estate, tax, and corporate law to community-based organizations engaged in neighborhood revitalization initiatives. (14) CED legal programs have created jobs for the poor through microenterprise and commercial development, (15) increased the stock of affordable housing units through tax credit syndication, (16) and expanded access to capital through the development of community-based financial institutions. (17) As a measure of its appeal, CED legal practice has attracted financial support from government agencies and private foundations, (18) resulting in the development of a significant number of CED legal services programs. (19)

However, the current consensus in favor of market-based CED obscures deep historical divisions about the appropriate relationship between market mechanisms and social change. In the United States, the roots of market-based CED can be traced to the rise of post-Reconstruction economic nationalism, (20) which focused on developing an independent African American economic base through the enhancement of job skills and the creation of black-owned businesses. …