Laws That Create Countervailing Power
How can organizations of poor and working people build countervailing power against large institutions? One strategy is to devise laws that create opportunities for organizing and political leverage to change the distribution of power and alter substantive outcomes. The National Labor Relations Act of 1935 is one such law. The NLRA invited and defended union organizing. The Community Reinvestment Act of 1977 is another such law. It created an affirmative obligation on the part of banks to serve communities, which in turn provided an organizing target. What laws like these have in common is that they don’t attempt to shift power directly but facilitate organizing for countervailing power.
Law professors Benjamin Sachs and Kate Andrias saw in such laws a template with broader applications. Their recent article in The Yale Law Journal spelled out some principles and opportunities. We invited them to have a conversation with Steve Kest, who had extensive practical experience using such laws at ACORN; and Bob Kuttner, co-editor of The American Prospect, who in an earlier life wrote CRA. Bob moderated the discussion, which has been lightly edited for clarity.
Benjamin Sachs: The primary idea in our work is that countervailing power is a key strategy for combating political and economic inequality and that law, if structured to this end, can help facilitate the building of countervailing power by poor and working-class people.
Our recent article in The Yale Law Journal opens with the observation that government is responding nearly exclusively to the wealthiest slice of the polity. And that while there have been a number of attempts to deal with this problem, none have been very successful.
Taking money out of politics is the campaign finance approach. Then there’s the voting rights approach, which is to enhance the ability of a broader swath of citizens to participate in elections. While we applaud both of those approaches and think that they’re necessary, we also see their limitations.
A primary limitation of campaign finance reform is a hostile Supreme Court, which has used the First Amendment to insulate wealth from regulation. And there’s also what’s been called the hydraulic problem in campaign finance reform: If you cut off one channel of spending, that spending will just find other channels.
With respect to voting rights, they are absolutely critical to the effort to equalize political participation. But so much power is exercised in ways other than the ballot box that the voting rights approach, even if it were successful, would be an incomplete solution.
So the starting point for our thinking is that, in addition to campaign finance reform and voting rights, we need a legal regime that facilitates the construction of countervailing political power among low- and middle-income people to countervail the power of wealth. To imagine that kind of legal regime, we turn to two sources. One is labor law, which is the regime we know best and which probably constitutes the most robust extant legal intervention designed to facilitate political organizing by working people. We look at what’s worked and what’s failed.
But we also looked at other social movements, and social movement theory, to develop a set of things that law might do to facilitate political organizing. We came up with five or six basic types of interventions.
Kate Andrias: First, we argue that law should grant collective rights in an explicit and direct way to create a frame that encourages organizing. There’s quite a bit of evidence from the sociological literature, as well as from the lived experience of organizers, that this kind of frame both encourages and enables organizing.
Second, the law should provide for financial, human, and other resources. Having enough resources for organizations to thrive and to do their work is critical to their success. Resources range from money to information that helps direct the work of the organization and inform its leadership.
Third, the law should grant free spaces in which movement organizing can occur, free from surveillance and control. Those spaces might be physical spaces or they might be digital spaces; the key is that there are spaces where people can get together and organize and not be under surveillance.
Fourth, the law should remove barriers to participation both by protecting people involved in organizing efforts from retaliation and also by removing material obstacles that make it difficult for people to organize. For example, for poor and working-class people, not being able to take time off from work or not having child care is a real barrier to engaging in organizing. So we call for both removing threats of retaliation and removing those kinds of material obstacles.
Fifth, the law should provide organizations with ways to make material change in their members’ lives, and it should create mechanisms for the exercise of real political and economic power. That means creating ways to engage in bargaining with private and public actors that actually correspond to the way political and economic power is organized.
And then, finally, the law should enable contestation and disruptive collective action. One might think that, in an ideal world, political power would be exercised without contestation or disruption. But, in fact, in order to make change that benefits working-class people, there often has to be the exercise of power in the form of strikes and protests and other kinds of disruptive activity. We argue that the law should protect that activity.
We think that this approach of building countervailing power is not merely a second-best option—it is not merely the route to pursue because campaign finance reform and voting rights reform face significant hurdles. Rather, organizational power is essential for enabling people to participate effectively in the political process.
Historically, organizations of working people and poor people have been extraordinarily important. Their mobilization is really the only way that significant progress has been made, whether it’s on labor issues, housing issues, the range of civil rights issues. Organizational power is essential to political change. Organizations also give people a way to build connections among one another and to practice democracy on a daily basis, so it’s not just that campaign finance hasn’t worked, but that having organizations in which people can exercise control and have a voice over the political economy is essential to having a functioning democracy.
Sachs: It’s important to stress that the demands of organizing and the needs of organizers vary across contexts. And so, the idea is to provide a framework that we think is generalizable in the sense that it will guide applications, for example in the tenant context, or in the debtor context, or in the public benefits context.
But this is not meant to be a cookie-cutter solution. This is not the NLRA for debtors, this is not the NLRA for tenants. It’s a framework for thinking about how law could be used to facilitate the organization of countervailing power across contexts.
Steven Kest: I totally agree with the perspective Kate and Ben lay out, and I share the view that organizations are critical. Organizations are the vehicle through which everyday folks exercise power. Having spent almost 50 years working in various contexts trying to build organizations, I am more than sympathetic to this concept.
I’ve spent some time over the last year working with tenant and community organizations in New York to explore Ben and Kate’s concept of building tenant organizations. In New York and elsewhere around the country, the tenant crisis has become more and more extreme. It has led to a huge upsurge of tenant organizing and tenant activism, including mass rent strikes. Some of this took the form of politicizing the inability to pay rent, which was the experience for many people during the pandemic. And then on top of that, we’ve seen a corporate consolidation of the landlord class. So, we need some type of organization that has the power to really contest the massive influx of private equity and other corporate owners into the sector, and landlords generally.
There has been a significant increase in legislative activity following the expanded organizing activity and rent strikes. That’s included the rent moratoriums that many states have passed during COVID, plus the federal emergency rental assistance program, which provided $50 billion in federal money to help people pay rents.
There’s been a similar effort to pass laws that address other aspects of the tenant crisis, some of which have been pretty successful. These include rent stabilization laws and the current efforts under way to require good cause for eviction. However, even in a progressive state like New York where Democrats control both houses of the legislature and the governor, we can’t win everything we want to pass, so how do we build the power that we need to really take the power from the landlords? How do we create some type of process to facilitate organization?
There is one interesting example that some of our colleagues in California pursued. San Francisco in April passed an ordinance that compels landlords to bargain with recognized tenant associations. It does so by treating the obligation to bargain as similar to the obligation to provide heat, hot water, and other necessities that landlords are already required to provide. And if a landlord refuses to bargain, tenants are entitled to rent reduction in the same way as if they don’t get hot water.
It’s early yet to see how effective this will be. In addition to single-building models like San Francisco, we also need to think about the equivalent of sectoral bargaining as a way of giving tenants power in relation to landlords who own multiple buildings, particularly corporate and private equity landlords. And we’re also trying to think about whether there are geographic communities that we could create organizations in, which then give tenants political power. You can imagine creating the boundaries of the geographic entities coterminous with the appropriate legislator, so tenants in a state legislative district would have a basis to organize and then engage with their legislators.
We have support right now from the progressive candidates for governor and lieutenant governor in New York. And they are raising this issue of tenant power as part of their campaign conversations. As we have more clarity about what this legislation might involve, we plan to start talking to legislators and developing a plan to pass legislation in 2023.
Robert Kuttner: Thanks, Steve. I wanted to say a few words just about the general framing that Ben and Kate have come up with and apply it to some other historical examples that gave poor and working-class people standing that in some cases both provided resources and proved reasonably durable.
There’s a nice book that my colleague Paul Starr wrote called Entrenchment. The book discusses which strategies turn out to be durable and which ones blow away. Obviously, the NLRA is one of the most durable. It also transfers real resources because it enables unions to collect dues so that unions don’t have to go hat in hand to foundations.
But there are some interesting other examples. An interesting one is the REA co-op. By design, the rural electrification legislation of the New Deal era created local co-ops that would have members who would exercise real power. These have turned out to be avenues for organizing people and for incubating local leadership.
There have been others that have been more short-lived. For a time, Massachusetts Fair Share was a multi-issue membership organization that exercised real power in city and state affairs in the 1970s and 1980s. VISTA volunteers provided a lot of salary support to a lot of organizers. And then Reagan came in and killed VISTA. So the notion that government could provide money directly to organizers is only as good as your political coalition. Mass Fair Share literally went broke because they lost about half of their paid organizing staff when Reagan pulled the plug on VISTA.
Then you have the whole OEO saga, where the idea was to create community action agencies that would provide resources and empowerment and standing for poor people themselves. CAP agencies did end up helping to incubate a whole generation of insurgent African American and Hispanic elected officials, but it wasn’t very durable because it threatened incumbents and, within a few years, Democrats as well as Republicans in Congress cut its funding and put the remainder under the control of local governments.
Head Start in the South turned out not only to provide early education, but it was literally the first institution that provided independent funding and professional jobs that could not be vetoed by the local white power structure. Head Start had a broad enough national constituency that it endured.
So you can do a whole taxonomy of different kinds of interventions that created leverage that helped create countervailing power.
The one that I was most directly involved with is the Community Reinvestment Act, which I wrote. CRA began when a delegation of community organizers from several cities came to see Sen. William Proxmire, chair of the Senate Banking Committee, when I was working as his chief investigator, with a whole plan. They reasoned that if you pass this legislation, that would help us build power.
The idea was wonderfully ingenious in its sophistication and simplicity. And there were actually two statutes, the Home Mortgage Disclosure Act of 1975 and then the Community Reinvestment Act of 1977. These laws enabled organizers to go after banks and deliver victories that would validate the organizations. Reinvestment funds flowed into communities but only sometimes flowed into organizations. Steve, what was your experience with CRA?
Kest: CRA is the example we always point to, and at ACORN, we used the Community Reinvestment Act in two ways. One was it gave us leverage in relation to banks. We were able to force banks to come to the bargaining table and bargain over the terms and conditions of their mortgage policies, which gave a huge amount of power to community organizations. When we first exercised it, the banks were horrified to have to bargain with low-income communities of color. Over time, they were forced to change their policies to meet the needs of our communities.
But the second point to make about the CRA is that it provided a way to move resources to organizations, if you were smart about it. We at ACORN set up a separate corporate entity, ACORN Housing Corporation, which created a mortgage counseling program that, as part of our negotiations with banks, we demanded they fund. That then helped people access the much better mortgages that the banks committed to making. And so we had thousands and thousands of homeowners who went through our mortgage counseling and got nonpredatory mortgage products. Homes stabilize their communities; people became civically active.
CRA did not generate automatic empowerment. You still need organizers to connect that virtuous circle. There was nothing inherent in the law that built organization for you. But, in giving organizations power and then providing a vehicle to generate benefits that went back to the members of that organization, it created a very clear material incentive for people to join the organization.
Sachs: I don’t think anybody thinks there’s a law that creates power without organizers. As Steve says, smart organizers can take advantage of various forms of leverage that legal systems create and use that leverage to build power. But something different happens when a legislature enacts a law that says, explicitly, we think it’s right for people—those reached by the law—to build an organization of countervailing power. That may sound funny, but it’s actually what the National Labor Relations Act said. And because the NLRA was explicit, organizers at the time could go into the coalfields and say, “The president wants you to form a union.” That actually mattered quite a bit, and so I think that’s worth highlighting.
The other issue has to do with funding and the question of direct government funding of organizing. Now that’s something that Kate and I in the paper actually say is a viable approach. There are constitutional questions that would need to be addressed. And, if you have a system that relies on government funding, it is particularly vulnerable to shifts in political winds, which your question points out. That’s not to say we should never try it, but you have to be acutely aware that if you know the Biden administration is going to do one thing, the next Republican administration will do something quite different.
It strikes me that a law which empowers organizations of low-income people to extract revenue from the relevant private counterpart is relatively more durable. Of course, nothing is immune from political change because anything that can be established by politics can be taken away by politics, but the system that allows organizations to develop, to bargain, and, through bargaining, to extract value from the counterparty is harder to take away than is direct government funding.
Kuttner: The great thing about CRA was the whole concept came from organizers. As leverage, CRA doesn’t say, OK, the government is going to hand you this money, ACORN. The CRA says, this gives you some leverage by which you can go out and organize. And so it incentivizes more organizing, but it doesn’t supplant organizing.
Andrias: The other thing about resources that I would add is that self-funding—and having the law facilitate self-funding—is valuable. Now, of course, in a context where a membership has very little money, it might not be enough to rely on self-funding, but there’s real democratic value in organizations being able to generate revenue from their own members and not relying on foundations, wealthy donors, or government for money. Ultimately, what we suggest in the paper is that there are multiple sources of revenue that can be helpful for creating durable organizations. As Ben was emphasizing, being able to extract or redistribute resources from very powerful organizations to organizations of working-class people is critical, but so too is having the law facilitate ways for people to fund their own organizations. This is something that’s been quite successful in the context of the NLRA.
Kuttner: I was curious whether you thought there was any promise in housing co-ops, where you have a certain amount of institutional power and financial power because the housing is not owned by a landlord at all. And, by definition, the co-op has financial resources, it has standing, it has legal power.
And my other question: Is some possible use of whistleblower legislation, so called qui tam actions, whereby in addition to the money flowing to the whistleblower, the money could perhaps flow to some organization and then could be used to facilitate organizing—is that worth looking into?
Kest: Going back to the old ACORN experience, one of the most powerful and durable organizations that we built came out of the squatting campaigns that we ran in the ’80s, where we forced various cities to turn over city-owned vacant property to the squatters, now officially called homesteaders, and created limited equity co-ops. And we built into those co-op structures a revenue stream for the organization.
So it was self-funding, but on top of that, it speaks to some of what we were talking about earlier with CRA: the material benefit that was delivered to the squatters. Having a permanently affordable roof over their heads for themselves and their children and their grandchildren led to some of the most loyal and active and participating ACORN members that we ever had. People who are still there in those co-ops and are eternally grateful to ACORN but even more than that have a sense of their own power and capacity to fight. The cooperative nature of fighting for the victory and then creating a structure that allows people to share in the benefits and fund the organization is what you’re getting at, and that’s, I think, what we were able to do.
Sachs: I don’t have a ton to say about qui tam. There are unions that have explored the idea and pursued qui tam actions. In general terms, my sense is that belongs in a category of creative approaches that organizations ought not to have to rely on. That is to say, what makes sense, as Kate was alluding to, is a dues structure where an organization can self-fund and has the right to bargain with the counterparty for resources to help fund the organization. And when that doesn’t exist or when that’s inadequate, there’s lots of creative approaches, including things like qui tam.
Kuttner: I was just fantasizing in the case of wage theft and misclassification, where some of the money recovered might go to the organization that brought the action, as well as the individuals.
Sachs: There’s an analogue in California, called the Private Attorneys General Act, or PAGA, which allows a qui tam–like procedure. That statute and the viability of that statute is currently being questioned by the Supreme Court.
Kest: Another example that is out there, and this goes back to the early days of Ralph Nader and the PIRG, there’s a student fee that goes directly to the organization.
Kuttner: Another Nader idea that still exists is Citizen Utility Boards.
Kest: Right, a fee is added on to the utility bill that funds an organization that then represents utility consumers in dealing with public utility commissions around utility rates. I think all of those remain promising and also are useful models for thinking about how to expand this concept.
Kuttner: What’s interesting about this conversation is that most of the examples, right now, given the blockage of federal legislation, are state or municipal—that that’s where you’re going to succeed at advancing this whole paradigm. At least for the foreseeable future.
Andrias: In the housing area, there’s quite a lot of ability to enact legislation at the state and local level; most housing law is local. In contrast, in the context of collective labor rights, federal preemption doctrine makes it difficult for states and localities to enact much labor law reform. However, there are opportunities for administrative experimentation at the federal level, even if there are not opportunities for congressional legislation, given the blockages in Congress. In fact, we’re seeing quite a lot of innovation from the current general counsel of the National Labor Relations Board.
For example, the current Board is framing much more clearly that the NLRA affirmatively protects the right to organize and is making clear that the agency is there to protect that right. The Board is also more effectively protecting workers from retaliation, consistent with the statute.
Sachs: One of the things that Amazon has objected to [in the successful election in Staten Island] is that the NLRB has been, in Amazon’s view, too pro-union. Of course, what they’re objecting to is that the NLRB is doing its job and enforcing the law. But that’s such a shock given how weak the agency has been over the years that it’s having the effect that Kate outlines, which is a framing effect for working people that you do have a right—it’s been on the books since 1935—you have a right to form a union.
Kest: A couple other examples that I think are useful in this context. One is the Department of Labor has for a while funded worker center organizations to do, in effect, enforcement from below of labor standards, and many state governments do the same. But that’s another useful example: Worker centers can get funding to hire organizers.
There also was a lot of discussion in the context of the federal COVID relief bills and, before that, in CARES and then in the context of Build Back Better, about funding for community organizations to do outreach to help people access the benefits that were provided in that legislation. People in the Biden administration understood some of the lessons from the Obama experience that, in order to have people give you political credit for the things that you pass, you need to actually tell them what you passed and then help them access those benefits. And so there was a little bit of lip service to that in some of the legislation.
One of the examples that some of the organizations I’ve worked with took advantage of was funding for vaccine outreach. I know a number of community organizations affiliated with CPD have been able to access this funding. These organizations are very effective in doing outreach: They hire hundreds of their members to go door-to-door during election season, and then they lay them off after the election. Let’s keep those people on payroll doing vaccine outreach.
In the period when it was hard to access vaccines and especially in the context of negative publicity about vaccines, we got HHS to set aside a couple hundred million dollars that went directly to community organizations to do this. Organizations hired hundreds of people, their members, to go door-to-door in very culturally competent ways and educate people about vaccines and how to access the vaccines—where to go to get appointments and so on—and they took names and numbers and talked to people about other issues.
And then the organization can use non-federal money to follow up, but it really is this money that is still funding hundreds of outreach workers/organizers who are talking to people every day about how the pandemic is affecting them and what they might be able to do about that.
Kuttner: That’s great. There’s one more example in the labor area: Committees on Occupational Safety and Health, or COSH groups, which have been around since 1972. Those are committees where frontline enforcement can be delegated downward to frontline workers and in exchange for streamlining inspections. If it’s a unionized company, they become venues for breathing some life into the local. If it’s a non-unionized company, they become venues for worker consciousness raising.
Sachs: There’s a new iteration of this that the Clean Slate group here at Harvard has urged. Namely, in light of the pandemic, we’ve called for city and state legislation to establish safety and health committees run by workers, and Jobs With Justice has been actively involved in moving some of this legislation in cities and counties across the country.
Andrias: In New York, NY COSH is actually quite active and serves a lot of the roles that you were addressing, and together with other organizations in New York was instrumental in passing legislation along lines of what Ben was talking about.
Kuttner: Any other thoughts?
Sachs: There’s been an important theme in the reactions I’ve gotten to the article, which I know Kate and I have both heard, and that is how can two people who have spent their careers writing about the failures of American labor law endorse the exporting of the principal features of that law to other contexts. I think that’s an important question, and I want to take a minute and try to answer it.
One part of the answer is when we imagine a legal system designed to build countervailing power, we have to be acutely aware of the way that labor law failed. And that includes the racist and gender exclusions that were built into the National Labor Relations Act, from the beginning, and we have to be on guard to avoid anything like that in new laws that we design.
The second part of the answer is that the fact that labor law has failed does not mean that the project is an inherent failure. That is to say, there are pieces of the labor statute that do work when enforced. That if you enforce a law like the labor statute, one which gives people an explicit right to organize, that protects them from retaliation, that gives them access to employer property, that establishes a dues mechanism, it’s going to help build worker power.
And so there’s a not-throwing-the-baby-out-with-the-bathwater feature of all this, which is to say, yes, the labor statute has been eviscerated, yes, the Supreme Court has been a huge problem, yes, there are structural problems with the way it was written, but the basic idea of using law to facilitate organizing is one in which I think we still believe.
Andrias: I would just reinforce a few other points. First, organizing and organizers are really at the heart of this work. We do not suggest that law is the most important piece of building countervailing power, nor do we suggest that legal reform can do the critical work on its own.
Second, as Ben said earlier, it was not our intention to offer a cookie-cutter or blueprint at all because in each context different approaches are more or less helpful. Reforms need to be tailored in particular ways. Organizers are best able to identify what kinds of interventions will most facilitate their organizing.
Third, it’s important to recognize that our law already does facilitate organization, largely for capital. Corporate law, property law, tax law all do this. So it’s not a radical thing for law to intervene to facilitate organization. We are just suggesting to do it in a different way so that power is more equally distributed in our society.
Finally, our focus on particular contexts is not mutually exclusive with a political party approach. But the contextual approach grows out of the recognition that social networks and social relationships exist in context. There are particular power relationships between, for example, landlords and tenants, or bosses and workers. Also, policy change often focuses on certain subject matter. We’re not suggesting that countervailing organization should only be context-specific, only that this is one important way in which countervailing organization should be built.
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