We are in unique times. Wars are raging across the world; our economic, financial, social, environmental, and justice systems are strained to breaking. The rule of law is dismissed by the current administration. Artificial intelligence threatens to upend everything, and some of its champions seem convinced authoritarianism is the answer. Whatever you believe about climate change, we are experiencing the hottest temperatures on record, year after year—this year France and Europe endured two significant heat waves resulting in hundreds of deaths.
It looks bleak. And yet, just eighty years ago, at the end of World War II, Europe was a pile of rubble. Today, those countries have thriving economies. As bad as it looks right now, we already have examples of solutions that work.
Two Precedents
In 1944, as sixteen million WWII veterans prepared to return home, a massive recession was feared—based on the experience after WWI, when five million veterans returned to no jobs, chaos ensued, and recession followed. In a preemptive effort, the Servicemen’s Readjustment Act—the GI Bill—was written in January 1944 and became law by June. It took six months from idea to implementation.
At war’s end, a decimated Europe had no financial means to reconstruct itself. In 1944, at Bretton Woods, New Hampshire, world leaders created the World Bank and the International Monetary Fund, originally designed to fund postwar reconstruction. On June 5, 1947, in a commencement speech at Harvard, Secretary of State George C. Marshall introduced the concept of the Marshall Plan; President Harry S. Truman signed the Economic Cooperation Act into law on April 3, 1948. Marshall Plan funding restored Europe, and the World Bank shifted its focus to global development. It took ten months from idea to implementation.
Clearly, the world was at a point where only massive intervention could provide solutions—solutions created, in essence, out of thin air to address a global trauma. And here we are again. Technology, climate change, the end of work—all are forcing a shift equivalent to the devastation of WWII. We need to create new solutions out of thin air. We can see that this is possible, and that it can produce great outcomes.
Past Government Success
The success of the GI Bill cannot be denied. The United States went from a nation of high school graduates to a nation of college graduates, from a nation of renters to a nation of homeowners. As Edward Humes wrote in Over Here, the education it funded produced 14 Nobel Prize winners, 3 Supreme Court justices, 3 presidents, 12 senators, 24 Pulitzer Prize winners, 238,000 teachers, 91,000 scientists, 67,000 doctors, 450,000 engineers, 240,000 accountants, 17,000 journalists, 22,000 dentists, and millions of lawyers, nurses, and small business owners. (One caveat: these benefits went mostly to white men.) The Marshall Plan’s success is equally visible in Europe’s thriving economies today.
How Shall We Fund the Transformation?
The GI Bill and the Marshall Plan were government programs that produced incredible outcomes and enabled the rise of the consumer economy. The beneficiaries included US citizens—but also large corporations that have accumulated massive wealth over eighty years, while lower incomes stagnated and technology reduced employment. So this time, instead of government funding, it could be private investors with access to massive funds who facilitate the first phase—providing the first level of funding to kick-start the infrastructure of the new Local Community Capacity sector, with ICV-type businesses and community nonprofits among the recipients.
Private individuals or companies who invest would receive a full tax moratorium for a set number of years based on the amount invested. Once this infusion has occurred, secondary funding becomes possible, bringing the local market sector and LCC businesses into a buy-local, closed-loop system that creates a strong local economy.
A Market-Driven Solution
The market has always said that if it were taxed less, it would create more businesses. Here’s private business’s chance. Legislation could pass quickly for this market-driven solution. Funds would flow through a Local Community Board, which determines the needs of its community in the new LCC employment sector. Market-sector businesses contribute each year, receive a tax reduction, and watch their local revenues increase. Local communities thrive, small businesses thrive, and everyone wins—with revenue infused through the LCB resulting in a stronger economy overall.