I. Identifying the Problem 

Across the world, globalization continues to broaden local communities’ exposure to the influence of powerful multinational corporate entities and the capital that funds their ventures. Municipalities and States often lack sufficient legal authority, political will, or the economic position to regulate growth associated with capital influx when, for example, “Amazon comes to town.”1 This leads local communities to cater fiscal policy to satisfy the demands of incoming capital rather than meeting the needs of local constituents in the long term. When capital investments determine the shape of local fiscal policies, it constitutes a market form of development conditionality. 

The coercive activity of capital does not cease once local economic activity begins. It continues in the form of lobbying against universal basic income (UBI) or raising the minimum wage.2It echoes in threats to relocate when Covid-19 restrictions interrupt Tesla profits.3 When corporations make good on the threat of capital flight,4taxpayers in Detroit, for example, are left to pay the bill for an inflated infrastructure that is no longer supported by Ford Motor Company’s capital, and the direct (and associated) economic activity it enabled.5 The very infrastructure which the municipality reorganized to attract then becomes a burden. State and federal governments adapt by organizing at the expense of taxpayers to reskill coal miners in West Virginia,6for instance, without necessarily securing adequate market capital to match employment and tax revenue levels anticipated by the developed infrastructure. This necessitates ongoing subsidies and economic migration, in contrary motion.7 

When local policy caters to the interests of outside shareholders—when ownership trends in the means of production mirror England’s land ownership trends in the Enclosure period8— society tends toward feudalism. This trend against democratic ownership and management of local economies is characteristic of an extractive ethos that obscures economic relationships through invisible chains of commerce and property rights. While a globalized economy is touted by corporatists and policy makers as progressive, it often functions more like a mining operation. It transforms local communities into strategic locations; community members into labor markets; ecosystems into natural resources; customary rights into private rights; co-owners into wage slaves.9  When these assets have depreciated, they are replaced. In the migratory firm, capital replicates tragedies of the commons in our hometowns. Meanwhile the next municipality welcomes capital influx because of the development and growth it promises. All the while profits increase; all the while the wealth divide continues to grow.10 

This is not a necessary or unavoidable outcome of market systems. Infrastructural burdens and duplication represent some of the externalized costs left in the footprints of capital. Decision makers at every level of governance can avoid these outcomes through policy. Indeed, many communities are already engaged in avoiding some of these risks by enacting “smart growth” policies that seek to condition growth to meet planning goals, often by promoting policies such as infill development.11In certain sectors such as solar energy production, local decision-makers are beginning to require decommissioning bonds12to ensure that the physical footprint of temporary economic activity does not become a blight on the tax rolls. In many states, unemployment benefits and other social safety nets ensure that workers who are laid off still have the means to survive. These measures alleviate some of the symptoms of capital influx and flight. 

The American Planning Association (APA) provides guidance for local government planning. This guidance includes objectives such as building a “resilient economy” and “interwoven equity.” Together, these objectives are meant to ensure that local economies can respond positively to changes in economic conditions, thereby ensuring equity in access to livelihood for the local community.13 Efforts in this area, especially with respect to environmental policy and planning, fall under the umbrella of resilience and sustainability (R&S). R&S “provide[s] analytical frameworks to help understand and, ultimately, address new, changing, and complex economic, environmental, and social challenges.”14 These frameworks help decision-makers and local communities examine their role “in creating, exacerbating, or remedying challenges arising in economic, social, and ecological systems.”15 

The R&S movement, along with the broader environmental movement, has historically fallen short with respect to addressing the systemic economic issues producing undesirable ecological and economic results. This has prompted many environmental leaders to refocus efforts on building a “new economy.”16 The call to build a new economy requires local communities to re-examine ownership structure and commensurate access to 

capital through the lens of R&S and intergenerational equity. Analyzing the resilience of social-ecological and economic systems requires observing the following: 

“(1) the degree to which the system can absorb disturbance and still remain within the same state or domain of attraction; 

(2) the degree to which the system can self-organize and the quality of that self-organization; and 

(3) the degree to which the system can build and increase the capacity for learning and adaptation.”17 

This paper sketches a metric to measure the impact of ownership structure and equity distribution on local communities’ economic resilience. In particular, it will analyze capital influx and flight as a disturbance to which the local economic system must respond. This research should not seek to condemn market systems, globalization, or development as mala in se. Instead it should gather and analyze data to discover whether R&S advocates should support a decoupling in the theory of “the firm.” Many local decision-makers are primarily concerned with fiscal policy. In order to support a distributed ownership regime as a means of promoting local R&S, it must be shown that there are no inherent relationships between price signalling systems and equity distribution. The research should also explore whether wage systems and managed coordination are intrinsically intertwined. 

In the cooperative corporation, democratic processes can internalize environmental and social costs by gathering localized feedback in the decision-making process. Coworkers can use democratic processes to elect systems of managed coordination by designating executive functions among co-laborers. Democratic processes can interpret and respond to price signals in market systems. In the cooperative corporation, laborers can democratically direct profits and vest equity or authority. The goal of this research is to test the proposition that cooperative corporations with more uniform distributions of equity among laborers and/or consumers foster more resilient and sustainable local economies. 

II. Research Objectives 

This research should take an interdisciplinary approach, with elements of philosophy, economics, law, sociology, environmental justice, economic justice, community development, finance, and planning. The logic will flow from history and philosophical analysis, to resilience and sustainability planning principles, to economic modeling, to case studies and data presentation, to econometric modeling, to analysis and conclusion. This paper aims to promulgate a school of thought which provides the following: 

● A framework for examining equity distribution through the lens of resilience and sustainability (R&S), and local democratic access to capital through the lens of intergenerational equity 

● A reframing of capital flight and subsequent infrastructural burdens and duplication as a form of social-ecological pollution

● A reexamination of capital influx and capital flight through the lens of R&S, noting disturbances18 and thresholds19 of existing socio-economic systems, particularly infrastructure, public services, and out-migration 

● A foundation for an economic theory that decouples price systems, ownership structure, and managed coordination within market economies 

● An econometric model that expresses the local economic impact of equity distribution 

● A legal, historical, and philosophical examination of the foundations of securities,20 particularly through a liberation philosophy lens 

● A legal framework for cultivation of community-based capital ownership, including cooperative corporate entity formation and capitalization, circular economics, and creation of a clearinghouse of Local Direct Offerings and National Market Securities to facilitate investment in cooperative and community-owned enterprise 

III. Methodology 

The sources for this research will be mixed because of the interdisciplinary nature of the question. The texts listed in the attached Recommended Bibliography provide research material for the philosophical and economic theory components, and could guide construction of a philosophical framework and economic model that describes local economic resilience. The research for corporate and municipal groups will largely consist of secondary data analysis. This will include examining ESG reports, newspaper and journal articles, municipal and state fiscal indicators, surveys, and more. Other research may include surveys, interviews, and focus groups with laborers, owners, city planners, and others. The research will be conducted to gather both qualitative and quantitative data pertaining to the impacts of distribution of equity in the means of production on local communities’ social-ecological and economic resilience. 

Resilience indicators listed in Section I and preliminary research should be used to create an economic model that describes municipal economic resilience. This model guides the collection of quantitative data from firms, such as number of laborers who are owners; number of owners who are local; percentage of equity based locally; percentage of equity owned by laborers; totally equity in the firm; ownership structure (cooperative, private, publicly traded, government-run); tax revenue generated; and more. Data will also be collected from municipalities, such as annual tax revenue; total number of laborers; locally based equity; resource depreciation/depletion; infrastructural costs; or ecosystem service values. These data can be used to construct cross-sectional data sets and a foundation for an econometric model that analyzes the relationship of equity distribution to local economic resilience. 

This project will face a number of challenges in establishing fixed variables. For example, different market structures or regulatory frameworks will come into play. Firms are not all engaged in the same sector. Economies across states are not similar, and wage and wealth discrepancies are difficult to take into account. Not every municipality has cooperative corporations. Populations and municipalities are not uniform. Informal economic activity is difficult to gauge. This will complicate the project because of the volume of unobservable factors. 

This project aims to lay a foundation for a longitudinal study on the effects of equity distribution on local economic resilience to establish a causal effect between them. Research will be particularly useful in developing economies, especially those transitioning from agrarian to market systems, and in jurisdictions where cooperative corporations are already thriving. 

IV. Research Constraints 

Anyone with intrinsic and sincere interest is encouraged to contribute, to run with these ideas. New information and perspectives will likely enhance the scope of the research. This research aims to provide beneficial research applicable to all members of the UN General Assembly, and to engage Sustainable Development Goal eleven—Sustainable Cities and Communities.21 

Because many social, economic, and environmental issues are tied to distribution of equity, the research has many directions it can take. For instance, ownership structure can be seen as a dividing force that exacerbates racial inequality. The intersectional impact of capital flight in wealthier communities often leads to “white flight,”22 because wealthier segments of local populations are in a better position to migrate when fiscal challenges degrade local quality of life, as was the case in Flint, Michigan.23 This research could deal with racial questions implicated by distribution of equity. 

Additionally, ownership structure is often intrinsically linked to displacement and/or loss of customary rights and indigenous livelihood, as when government sanctioned corporate land acquisition disrupts local community customs and economies in Mondulkiri, Cambodia.24 The research could examine the implications of “best use,” the benefits of managed coordination, environmental values in a commons regime, and internalization of environmental costs in a shared equity regime. The valuation of customary or informal environmental activity, and the potential of development to dilute local identity are closely related and ripe for review. 

Gender and sexuality are often implicated in analyzing systemic inequalities and are necessary to understanding and designing successful development implementation plans.25 Addressing these historic challenges is critical to building an equitable economy. Disability rights and inclusion as it pertains to R&S planning is equally critical. The impact of equity distribution on democratic institutions, the nexus of financial power and political power, as it pertains to R&S planning is perhap paramount to this research. 

Finally, the climate crisis affects all communities in various ways, and each community has a varied and differentiated role to play in addressing this present and looming catastrophe. While R&S undoubtedly contributes to the field of innovators already at work on the issue, this research will not examine the impacts of distribution of equity with respect to the climate crisis in the aggregate. Instead it will focus on the impact of distribution of equity on the social, economic, and environmental health of local communities individually. 

Recommended Bibliography 

● Leonardo Boff 

○ Cry of the Earth, Cry of the Poor (1995) - identifying ecological crises as a struggle for liberation, particularly among indigenous peoples 

○ The Tao of Liberation: Exploring the Ecology of Transformation (with Mark Hathaway, 2009) - describing pathways towards harmonizing economies with natural values 

● Kenneth Boulding 

○ The Economics of Peace (1945) - tracing capital flight patterns and impacts on famine, inflation, and peace 

○ The Organizational Revolution: A Study in the Ethics of Economic Organization (1953) - critiquing the movement of labor unions, trusts, and government agencies in relation to securing an equitable economy 

○ Towards a New Economics: Critical Essays on Ecology, Distribution, and Other Themes (1992) - examining the human economy through the lens of ecological equilibrium, and studying the impact of the grants economy 

● Noam Chomsky 

○ Market Democracy in a Neoliberal Order: Doctrines and Reality (1997) - examining the effects of neoliberalism on institutions of democracy and self-determination 

○ Profit over People: Neoliberalism and Global Order (1999) - describing neoliberal economics and its interference in global political affairs 

○ Socioeconomic Sovereignty (2000) - examining the corporatization of labor and diminishment of self-determination 

● Harold Demsetz 

○ Ownership, Control, and the Firm: The Organization of Economic Activity (1988) - describing the prevailing logic underpinning neoliberal economic institutions and development ○ The Economics of the Business Firm: Seven Critical Commentaries (1995) - examining the structures, behaviors, and incentives within the firm 

○ From Economic Man to Economic System: Essays on Human Behavior and the Institutions of Capitalism (2011) - providing an overview of human economic behavior and the development of market systems 

● Friedrich Engels 

○ The Condition of the Working Class in England (1845) - critiquing macro-industrial development from the perspective of local laborers and community livelihood 

○ Socialism: Utopian and Scientific (1880) - contextualizing socialist movements through history, and distinguishing ideals from political possibilities 

● Milton Friedman 

○ Capitalism and Freedom (1962) - providing the prevailing logic underpinning neoliberal economic theory 

○ Price Theory (1962) - describing pricing mechanisms and their function within positive and normative economics

● Gustavo Guttierez 

○ We Drink from Our Own Wells: The Spiritual Journey of a People (1983) - contextualizing historical suffering within the peoples’ movement toward liberation and community self-determination in Latin America 

● Friedrich Hayek 

○ The Road to Serfdom (1944) - cautioning against government control over the means of production 

○ Individualism and Economic Order (1948) - examining the moral philosophy of economic theory in market and planned economies 

● David Makarov 

○ What the Market Does to People: Privatization, Globalization and Poverty (2003) - framing globalization and conventional privatization as purveyors of popular impoverishment 

● Karl Marx 

○ Wage Labour and Capital (1847) - exploring trends in capitalist systems including pricing, labor power, and exploitation 

○ Manifesto of the Communist Party (1848) - examining history through the lens of historically oppressed people, and analyzing capitalist modes of production 

○ Theories of Surplus Value (1862) - deconstructing market economics through critiques in labor theories of value, and tracing distribution of surplus value 

○ Value, Price and Profit (1865) - connecting price to labor theories of value 

○ Das Kapital (1867-1894) - examining capitalist modes of production and its effect on political economy 

● Donella Meadows 

○ Thinking in Systems: A Primer (2008) - engaging systemic thinking to understand interconnected, overlapping, and nested socioeconomic systems generating undesirable social-ecological outcomes 

● Janelle Orsi 

○ Practicing Law in the Sharing Economy: Helping People Build Cooperatives, Social Enterprise, and Local Sustainable Economies (2013) - illustrating philosophy and practice of lawyering toward a sustainable, cooperative economy 

● Elinor Ostrom 

○ Governing the Commons: The Evolution of Institutions for Collective Action (1990) - exploring state, market, and voluntary management of common pool resources, especially natural resources ○ Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective (1993) - examining sustainable development through the lens of polycentric governance ○ Linking the Formal and Informal Economy: Concepts and Policies (2007) - correcting policy misconceptions of informal economies as disorganized 

● Jonathan Rosenbloom 

○ Social-Ecological Resilience & Sustainability: From Theory to Practice (2018) - describing and addressing complex social, economic, and environmental challenges from a planning perspective

● Melissa Scanlan 

○ Law and Policy for a New Economy: Sustainable, Just, and Democratic (2017) - identifying contemporary policy issues engaged by advocates for a new economy 

● Adam Smith 

○ An Inquiry into the Nature and Causes of the Wealth of Nations (1776) - providing theoretical foundations for examining political economy and capital 

● Jon Sobrino 

○ No Salvation Outside the Poor: Prophetic-Utopian Essays (2008) - constructing an economic ethic centered on satisfaction of human needs rather than wealth accumulation 

● Gus Speth 

○ The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (2008) - linking the environmental crisis to growing inequality and erosion of democratic institutions 

○ America the Possible: Manifesto for a New Economy (2012) - providing a theory of change for restructuring the political economy 

○ The New Systems Readers: Alternatives to a Failed Economy (2020) - gathering contemporary thought on building a new economy 

● Leon Trotsky 

○ Towards Socialism or Capitalism? (1926) - examining challenges facing the Soviet economy in a global market which was becoming increasingly capitalist 

○ The Permanent Revolution (1930) - positing worker control of the means of production as a means of securing political liberty 

● Cornel West 

○ The Rich and the Rest of Us (2012) - contextualizing the fight to eliminate poverty within other historic movements for social justice 

● Jeffery M. Woolridge 

○ Introductory Econometrics: A Modern Approach (2009) - providing a framework for analyzing equity distribution variables in resilience 

analysis

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1 Paul Roberts, “This Is What Really Happens When Amazon Comes to Your Town,” Politico Magazine, October 19, 2017. https://www.politico.com/magazine/story/2017/10/19/amazon-headquarters-seattle-215725 (last accessed 5/31/20).2 Marc Rod, “Business groups slam House for passing $15 minimum wage bill,” CNBC, July 18, 2019. https://www.cnbc.com/2019/07/18/business-groups-slam-house-for-passing-15-minimum-wage-bill.html (last accessed 5/31/20). 3 “Elon Musk threatens to move Tesla HQ out of California over Covid-19 restrictions,” The Guardian, May 9, 2020. https://www.theguardian.com/world/2020/may/10/elon-musk-threatens-to-move-tesla-hq-out-of-california-over-covid-19-restrictions (last accessed 5/31/20). 

4 Capital flight: “a phenomenon characterized by large outflows of assets and/or capital from a [country, region, or city]... resulting in negative economic consequences.” https://corporatefinanceinstitute.com/resources/knowledge/economics/capital-flight/ (last accessed 5/31/20). 

5 Peter Weber, “The rise and fall of Detroit: A timeline,” The Week, July 19, 2013. 

https://theweek.com/articles/461968/rise-fall-detroit-timeline (last accessed 5/31/20). 

6 U.S. Department of Labor, Division of Coal Mine Workers’ Compensation https://www.dol.gov/owcp/dcmwc/powergrants.htm (last accessed 5/31/20). 

7 Kayla Hinton, “Detroit; an abandoned city?,” Spartan News Room, July 12, 2017. 

https://news.jrn.msu.edu/2017/07/detroit-an-abandoned-city/ (last accessed 5/31/20).

8 Wendy McElroy, “The Enclosure Acts and the Industrial Revolution.” The Future of Freedom Foundation, March 8, 2012. https://www.fff.org/explore-freedom/article/enclosure-acts-industrial-revolution/ (last accessed 12/7/20). 9 Wage slave: “a person who works for a wage, especially with total and immediate dependency on the income derived from such labor,” Dictionary.com. https://www.dictionary.com/browse/wage-slave (last accessed 5/31/20). 

10 Juliana Menasce Horowitz, Ruth Igielnik, Rakesh Kochhar, “Most Americans Say There Is Too Much Economic Inequality in the U.S., but Fewer Than Half Call It a Top Priority,” Pew Research Center, January 9, 2020. 

https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/#household-incomes-are-growing-again-after-a-l engthy-period-of-stagnation (last accessed 5/31/20). 

11 “The main idea behind this movement is to channel development to areas that have existing infrastructure, such as urban and older suburbs, in order to reduce land consumption for new infrastructure and preserve green space, wetlands, and agricultural land.” Shelley Ross Saxer and Jonahan Rosenbloom, Social-Ecological Resilience and Sustainability. 2018. p. 296. 12 For example, see NYSERDA’s Decommissioning Solar Panel Systems: Information for Local Governments and Landowners on the Decommissioning of Large-Scale Solar Panel Systems. 

https://www.nyserda.ny.gov/-/media/NYSun/files/Decommissioning-Solar-Systems.pdf (last accessed 12/2/20). 

13 Shelley Ross Saxer and Jonahan Rosenbloom, Social-Ecological Resilience and Sustainability. 2018. p. 278.14 Id. at p. xxi. 

15 Id. at p. 3. 

16 Gus Speth lecture on “America the Possible: Manifesto for a New Economy.” 

https://centerforneweconomics.org/publications/america-the-possible-manifesto-for-a-new-economy/ 

17 Shelley Ross Saxer and Jonahan Rosenbloom, Social-Ecological Resilience and Sustainability. 2018. p. 13. 

18 “Disturbances are external influences that disrupt a system’s core characteristics and impact the system’s resilience… A system’s ability to bounce-back, resist, adapt, or transform following or in response to a disturbance is a measure of the system’s resilience to that disturbance.” Shelley Ross Saxer and Jonahan Rosenbloom, Social-Ecological Resilience and Sustainability. 2018. pp. 14-15.19 “A threshold represents the ‘tipping point’ of a given system that serves as the maximum measure of that system’s resilience relative to a disturbance.” Shelley Ross Saxer and Jonahan Rosenbloom, Social-Ecological Resilience and Sustainability. 2018. p. 16. 20 Here defined as any legal mechanism which enables an investing party to derive profits principally from the efforts of a third party. See SEC v. Howey, 328 U.S. 293 (1946). 

21 Sustainable Development Goals. 

https://amrefusa.org/sustainable-development-goals/?gclid=CjwKCAiA8Jf-BRB-EiwAWDtEGvkGm0r-8rd9w7WYIiB0GQvabSj4oR v9Q-Ahq8sHrlhCvYeedmxn9RoCuDwQAvD_BwE (last accessed 12/1/20).

22 See Jan Blakeslee, “White Flight” To the Suburbs: A Demographic Approach. Institute for Research on Poverty Newsletter, Volume 3, Number 2: Winter 1978-79. https://www.irp.wisc.edu/publications/focus/pdfs/foc32a.pdf (last accessed 11/30/20).23 Laura Pulido, “Flint, Environmental Racism, and Racial Capitalism,” Capitalism Nature Socialism, July 27, 2016. https://www.tandfonline.com/doi/pdf/10.1080/10455752.2016.1213013 (last accessed 5/31/20). 

24 Sochanny Hak, John McAndrew and Andreas Neef, Impact of Government Policies and Corporate Land Grabs on Indigenous People’s Access to Common Land and Livelihood Resilience in Northeast Cambodia. Land, 2018. 7, 122. https://www.mdpi.com/2073-445X/7/4/122 (last accessed 11/30/20). 

25 UNFPA, Frequently Asked Questions about Gender Equality. 2005. 

https://www.unfpa.org/resources/frequently-asked-questions-about-gender-equality#:~:text=Gender%20equity%20is%20the%20proce ss,on%20a%20level%20playing%20field. (last accessed 11/30/20).