Taking Movements to the Next Level
A Conversation with Aaron Tanaka, Co-Founder and Executive Director of the Center for Economic Democracy
Aaron is a Boston-based community organizer, economic development practitioner, philanthropic advisor, and impact investor. As executive director of the Center for Economic Democracy, Aaron stewards funding and capacity building programs to social movement collaboratives that advance alternatives to capitalist economics in the U.S. Previously, Aaron served as the startup manager for the Boston Impact Initiative, Boston’s first place-based impact fund investing in Boston’s working class communities of color. Until 2012, Aaron was co-founder and executive director of the Boston Workers Alliance, a grassroots organization nationally regarded for its statewide Ban the Box policy victory in 2010.
Aaron is a former fellow with Common Future, Echoing Green, Green For All, and Tufts Department of Urban Planning, and serves on multiple boards including the Commonwealth Foundation, the Foundation for Civic Leadership, and Neighborhood Funders Group. He is a graduate of Harvard College and Southern New Hampshire University.
Welcome, Aaron. My colleague Júlia and I will be alternating questions today. I’ll begin by asking about something interesting I noticed in your background. Which is that you got started with a combination of activism around prison work and food co-ops.
Right, I was an organizer with the Boston Workers Alliance and the executive director through my 20s. We were predominantly for people who are under- and unemployed, the thinking being that the conventional labor sector was organizing people with jobs. But we had a whole sector of people who had trouble just getting into work.
So I tried to build a kind of political base around that. Most of our members ended up being people who had criminal records and that barrier to employment. A lot of our work was around policy. We helped pass the Ban the Box policy in Massachusetts, which was precedent setting at the time.
But then coming out of that victory, a lot of our members were saying we still can’t get jobs, or the jobs that we can get are terrible. And they treat us poorly. So what else can we do?
And that’s where we started getting into worker co-op development. We had interesting relationships with the recuperated factories movement in Argentina. They had come up to the U.S. and we got to host them. Which meant our members got exposed to the idea of worker ownership.
Also our co-founder, Chuck Turner, who was a city councilor at the time, and one of my mentors, was a longtime Boston-based community organizer. At one point some years ago he worked at the ICA Group, as their education director, so he always had this perspective.
So a lot of inspiration was seeded by Chuck, and the workers in Argentina. And we ended up trying a few different projects. The first one was a vegetable oil collection company, retrieving veggie oil from restaurants and turning it into biodiesel.
That company ended up failing miserably, partly because it was severely undercapitalized. There was the incident with the old truck we found on Craigslist which had an oil spill in a residential neighborhood, with vegetable oil flowing down one of the streets and fire trucks coming out. Which is just to say we learned a lot about the pitfalls of trying to do business without the proper support or planning.
Then, as we tried being a growing cooperative, we got a bunch of community gardening space, with a bunch of our members growing food and distributing it for free to other members. And then, partnering with MassCOSH, an immigrant worker center, and Boston Center for Community Ownership, we ended up starting CERO Co-op, which is a composting business that is still running today.
That was all really instrumental in my own development, as I was transitioning out of the Workers Alliance, and helping start the Boston Impact Initiative, which is a place-based impact investing fund in Boston. BII actually became one of CERO’s first investors.
Notably, CERO Co-op actually did a DPO in 2014. That was the first direct public offering in Boston done specifically for worker co-ops. That opened up the possibilities of having community shareholders. And it opened up my thinking in terms of multi-stakeholder governance of economic vehicles, and strategies to combine community organizing and community ownership to build collective power.
Just a quick followup before I hand it to Júlia. Who were your inspirations and models around this time when you were getting started?
I’d say in the co-op space, there was Mondragon, and we also had Cooperative Home Care Associates in the Bronx, and the recuperated factories movement. We also had Equal Exchange here, which has always been prominent.
From a kind of conceptual standpoint, I was really influenced by reading the work of Michael Albert and Robin Hahnel on participatory economics, back in early 2000s, with their vision of a democratically planned economy. And within that vision, they also propose workplace democracy and different ways of balancing power within workplaces.
I think the piece that stuck with me was the idea of democratic planning of investment and consumption planning. A lot of the work that we did around trying to build the Boston Ujima Project was directly inspired by trying to work one tier above the enterprise level design.
Still related to your background, when did the idea of creating this workplace democracy and a people’s economy first speak to you on a personal level?
At a personal level, I grew up in the Bay Area, exposed to progressive ideas. I grew up in a middle class family, but in a very racially and class diverse kind of school system. And early on I was aware of the nature of policing and the racism in policing. So I already had a lot of feelings about what is fair, and I attribute much of that to my parents.
I spent most of my college career working on prison reform issues, interned at the American Friends Service Committee working on an anti-solitary confinement campaign. A lot of my questions were like, Why do we need prisons in the first place, and a lot of the early kind of analysis that I was exposed to was understanding the role of deindustrialization in the U.S. And the impact of globalization in creating a new class of unemployed, predominately black men and other men of color, while the economy is shifting towards the service economy.
So you have this “surplus labor” population, which understands that the role of prisons and policing was largely to contain the unemployment that was produced by profit seeking behavior through globalization.
That forced me to ask, Okay, prisons are terrible, but what’s the root cause? And what’s the function they play in society? Obviously, there’s the history between slavery and policing in the U.S., but unless we can get good jobs for everyone, where they can support themselves, and young people can meet their needs, there’s always going to be a level of want and an opportunity for the carceral state to be snatching our people up.
Then the question for me became creating the alternative to this capitalist system and that was really near the end of my college experience. I began looking for other ways to think about designing the economy. Early on, I came across participatory budgeting, public banking, and employee ownership, those three things.
At some point, through that experience with the Workers Alliance, I started to see that even our own members felt there was too much theoretical talk when you’re just trying to stay out of jail or not be evicted. People were actually hungry for real solutions. But with all our defensive maneuvering and policy proposals, at best we were going to mitigate the harm, but it wasn’t a true solution.
We started learning about these other approaches like worker cooperatives, which was very intuitive to our members who had gone through so many terrible experiences in their workplaces.
The Boston impact initiative got me into the space of finance and investing more directly. It helped me advance my thinking about how to democratize capital, which we integrated into the Center for Economic Democracy, which is our vehicle with which to push these forward-looking strategies.
Very cool. Coming from my background in legal studies, your comments really speak to my heart in terms of connecting these ideas of a new economy with the real problems we have today with our marginalization processes, systematic racism, and, and our prisons. And now we need to ground them in the solidarity economy framework.
I’m curious about how these wonderful projects — the BII, Boston Ujima Project, the CED — fit together and how did one lead to the other?
I started the CED right after I left Boston Workers Alliance to be a capacity building organization, specifically working with grassroots power building. Groups like the Workers Alliance folks were knocking on doors, holding protests, doing direct action, going to the statehouse, doing media work.
But to your point, Júlia, unless we make the solidarity economy relevant to the working class, this work is going to continue to be mostly marginal rather than being an actual solution to oppression and repression in our country.
There was a recognition that community organizing groups weren’t equipped to do alternative institution building. That’s kind of why I share that story about the failed vegetable oil co-op. I was really versed in legislative strategy and communications work, but when it came to business planning, that was an entirely different skill set.
And so the idea that if you just have the right political analysis and the community behind you, you can start building institutions — this wasn’t realistic.
So part of my commitment with the CED was to be explicitly anti-capitalist, but to try to play that line between being both radical and credible at the same time. This was back in 2012, 2013, so Occupy had happened, but it was still fairly early — Bernie Sanders and all that stuff hadn’t happened yet.
So that was kind of our intention but it was extremely hard to resource this kind of work at that time. People would tell us, I really don’t know what you’re talking about. Even our own ecosystem needed to educate themselves and sort of step into this work.
And so our first project came from one of my former funders at the BWA — David Ludlow — who asked me to steward half a million dollars that he wanted to distribute. We pulled together a bunch of other activists and leaders to start seeding Solidarity Economy projects.
One of those was the Solidarity Economy Initiative, which became our incubator for grassroots organizations to get small education grants. They’re intended to give people space to start imagining what resisting but also building might look like. But I wasn’t able to fund the whole organization at this time. I left the BWA, feeling pretty burnt out, and I ended up becoming a line cook at a Spanish tapas restaurant.
Wow. What happened next?
Then I also got hired to help lead the city’s first participatory budgeting process, one of the campaigns we had won at the Workers Alliance. The mayor announced that they’re going to give million dollars to young people to do PB with. So I partnered with the participatory budgeting project as their lead organizer in Boston.
So I was cooking while also helping to design and execute the first PB process in Boston. And then I met Deborah Frieze, who was starting the Boston Impact Initiative. She had this exciting vision, inspired by Joel Solomon in Canada, for an integrated capital fund using debt equity and grant making. And they hired me to be their first employee.
So I took this little detour into broad based, democratic, participatory design on one side and on the other doing very targeted place-based impact investing through the BII. And I was still trying to build up the CED. I came to see the power of direct impact investing.
As an organizer, with hundreds of BWA members, we were seen as one of the most forceful grassroots groups in our city. But when I stepped into rooms with public officials as an investor, I was related to in a very different way.
So I realized that in addition to the power of grassroots organizing, there’s also a lot of power in being a capital allocator or an asset steward.
The problem is that obviously rich people control the assets. But what if we were able to take that power of asset allocation, and make it a tool that communities could employ themselves. I started thinking about opportunities for democratizing finance and capital, not just in the way that usually people talk about it — about access to financial products — but about democratic governance over decision making.
And back in 2015 that led to CED partnering with BII, where I was still employed part-time at the time, and also with City Life, or Vida Urbana, which is one of our premier housing justice organizations. We launched a study group where we invited activists, organizers, business owners, investors, foundations, a multi-stakeholder network of about 40 people who spent half a year studying models of democratic finance — like credit unions, revolving loan funds, public banking.
I took all the learnings when I became a BALLE fellow — the group is now known as Common Future. So I was getting exposed to lots of other local economy models like time banking or the anchor institution work that the Democracy Collaborative was doing. We were able to take a lot of these ideas and put them into one ecosystem design, which was the Boston Ujima Project. I wrote a concept paper out of that and in 2016, we started earnestly trying to see if we could build this ecosystem.
So that’s how Boston Ujima came together.
Yep, and I was doing that under the hat of CED which was still really small. Boston Ujima ended up growing larger than CED. We hired Nia Evans, who was the executive director of the Boston NAACP, to become our first ED and then spent several years doing popular education, building membership, and then eventually building and now deploying their investment fund, now at $5 million.
The CED got its own 501c3 non-profit status in 2018, and we became fiscal sponsors of the Ujima Project. But in reality it’s a self-led, all Black team right now, doing amazing work. We provide them with some technical support and fund administration support, while learning from the amazing Ujima community that is executing on our vision.
Meanwhile the CED has since grown into a number of other project areas, including municipal democracy work around participatory budgeting where we successfully changed Boston’s constitution through a voter referendum, and the Coalition for Worker Ownership and Power (COWOP), which is advancing state policy reforms to bolster the worker co-ops and fight for workers on corporate boards. Both of which are kind of like full circle for me. But instead of seeding and piloting PB or worker co-ops, we’re one operating one layer above, exerting community power to institutionalize governmental structures to protect and normalize these approaches. You also see this with Ujima that is now leading a statewide campaign for a democratic public bank, or housing justice groups that are winning policies and funding for community land trusts.
I would like to touch on your point about building up from social movements and maybe expand that to beyond the United States. That is, building up the ecosystem in terms of democratic businesses and cooperatives and the challenge you mentioned about areas like governance and finance. Maybe you could say a little about what is the challenge here we are facing when we move into the economic realm.
That’s a really important question, because there’s what’s good in theory, and from a strategic standpoint, and then there’s what’s at stake for people who are actually trying to survive in these co-ops.
For me as a social movement strategist, it’s great to have worker co-ops that have the same membership as our worker centers, for example. You have the same people who are involved in resisting the current economy also working to build their own jobs. That sounds beautiful. But there’s also the reality that we’re talking about someone’s nine-to-five livelihood and so I do fear setting people up to fail.
I mean, one challenge is simply in the fact that business is hard. Creating any small business, a cooperative or not, is hard. The amount of blood sweat and tears that goes in just to survive, especially in a consolidating economy with the Amazons and Walmarts, that in itself is just a huge challenge.
For social movement organizers in our sector, there has been a longtime skepticism about finance and investment as some kind of evil stuff — like we don’t want to deal with dark magic.
But I think that attitude has shifted quite a bit in many of our prominent national movements, like Right to the City or the Climate Justice Alliance, both of which now have their own funds to do non-extractive investing in their particular membership base. They’ve partnered with Seed Commons, a national cooperative financing vehicle that Ujima Project is a member of and CED also supported early on.
And then there’s the technical skills involved in doing business development — which is another skill set. I went through to a master’s program in community economic development where I was exposed to accounting, business modeling, corporate governance and all that. But it still took time just being in the space to actually learn it for myself.
At CED, we have a new program area doing finance oriented training for activists. I think one issue is that people need to learn more traditional business skills, but it’s very hard to learn those when the political framework being delivered to you is completely opposite to what you believe. Profit maximization as the primary goal with no accounting for race and gender.
Part of what we’re trying to do is to demystify finance to help people build the theoretical scaffolding with which they can engage in this work with more confidence and without feeling like they’re being morally compromised.
This is something Elias and I often talk about — the need to create those linkages between movements in order to build up this community of practice.
Yes, speaking about things here in Boston, I think that we have a long way to go. From one angle, we’ve had some really meaningful qualitative shifts in the last 10 years. The city-wide participatory budgeting referendum in November is an important milestone for understanding our ecosystem in Boston.
The short background on that initiative is the study group CED held back in 2019 in which we had some city councilors and a bunch of activists asking the question of what would a democratic municipality look like? So if we had the power to change the city charter, how would we think about democratizing governance?
We concluded that we need to be addressing the rules behind the rules. So we have a CED report coming out soon that lays out our vision in a very cursory way. It includes participatory budgeting but also municipal banking, and democratizing public procurement, so that the actual consumers of these things have some say in who gets the city contracts.
I think for us the next big challenge is taking that next step into co-governance strategies with the city. In Boston, we have a historically progressive city council and we have Michelle Wu, a progressive mayor. The question becomes, how do we manage these participatory processes so that they don’t get co-opted by the city, so they actually help build up the infrastructure of civil society and our capacity to self-govern?
What might be something you could share with us from these experiences, some lesson or insight you’ve gathered in this process?
My biggest takeaway from all this work is that social change is not linear. I’ve learned that projects have their own lifespan. I love the question Nia Evans from the Ujima Project often asks: how do we make the air that we’re breathing? How do you shift the cultural environment so that things that feel so new or cutting edge become the norm and become obvious?
The more we have these small examples, it just starts to add up in a way that infiltrates people’s everyday lives in a good way. And that allows us to take these qualitative leaps and ask, why can’t we do this at the city level? Or why don’t we have a state public bank that we can govern? If we’re governing our own money at this level, why wouldn’t there be a voice for us?
I think the other lesson is just how much time everything takes, both in ecosystem evolution, but also within specific projects. The democratic process is time intensive. It’s an art to do it well. But what we’re learning through the Boston UJima Project is that we can raise our own $4.5 million fund, and will make the road while walking, which is fantastic.
I guess the last thing I’ll say is there’s always this danger of democracy fatigue, right? If we want to democratize our whole city, do people want to make decisions about everything? Probably not. So that raises questions about the role of delegated democracy or liquid democracy, some of these other tools that enable meaningful direct democracy, but also allow us to recognize the function of expertise. And that people have lives to live while still trying to keep a level of accountability. It’s complex, but only by democratizing democracy can we really democratize the economy, and visa versa. Right now, we’re (re-)learning how to walk as cooperators. Eventually we’ll get to run and dance.
Wonderful. Thanks much for your time, Aaron.