Mamdani & NYC’s unaffordable economy

The promise to tax the wealthy to finance social services propelled Zohran Mamdani to victory in the primary of the New York Democrat town hall on Tuesday. His campaign promises to reverse decades of social service cuts and to tackle the omnipresent inaction of NYC.

Taxing the rich for the good of the poor, however, contains an inherent contradiction. The rich are, in part, the very group whose concentrated economic activity has moved housing and the jobs of the working class for decades. To count on them to finance an affordable city, the risks simply perpetuating the problem, a lesson that the previous mayors learned too late.

To make Mamdani really succeed, he must do more than tax the rich – he must redo the city’s economy in the interest of his workers.

It is not a new insight. Like my book “The threat of prosperity”, details, as far as Henry George, the perceptual New Yorkers understood the intrinsic link between the growth of local wealth and the growth of local poverty.

The climbing of land values ​​translates directly into higher rents and an increase in homelessness. Unslated real estate speculation moves companies and communities in the working class. This cycle inevitably leads to growing poverty, an increase in crime rates and a drop in public health.

These social costs, widely generated by an economy designed around the rich, are then inevitably transmitted to the public sector. Social expenditure and critical social services, for example, become downstream necessities, mitigating precariousness and homelessness which result directly from an economic model designed to meet the needs of the rich. And such high costs have repeatedly led to the bankruptcy of the public – in the 1870s, in the 1930s, and again in the 1970s.

The administration of the Liberal mayor John Lindsay perfectly illustrates this trend. Throughout the 1960s, the New York financial sector exploded, but simultaneously, the poverty rates soaked, the deindustrialisation accelerated and the housing costs have arisen.

Lindsay tried to impose companies to finance the social protection services for the poor, but in the same breath, he actively subsidized the very companies whose presence contributed to making the city unaffordable. These expenses on behalf of the rich and the poor finally sank the finances of the city.

This argument does not consist in denying the crucial role of social spending, nor to reject the importance of the robust taxation of wealth. However, if Mamdani really intends to keep his campaign promise to make the affordable city of New York, he must go beyond the simple treatment of symptoms and confront the ultimate cause: a fundamentally designed economy to make the city inaccessible for the most part.

Fortunately, convincing examples exist both in New York and in the world that demonstrate a way to follow. Cooperatives belonging to workers, social housing initiatives and non-profit companies led by the community offer models to offer residents decent livelihoods without increasing urban non-affair.

Cooperatives, for example, have shown a proven capacity to increase employment faster than conventional companies and better preserve well -paid jobs during economic recessions.

Cities can actively promote these models. An excellent example is Preston, in the United Kingdom, which has managed to reduce its poverty rate by half by strategically redirecting economic development funds and municipal contracts towards local cooperatives and companies belonging to the community.

New York can reproduce and develop these principles. Instead of unnecessarily channel billions to companies whose job promises and the increase in tax revenue are frequently failed, we must redirect strategic economic development funds and investments in pension to companies belonging to workers and small businesses.

Instead of selling vacant city land to for -profit developers, we must transform it into dynamic centers of small businesses and cooperative companies, managed by community land trusts and non -profit organizations.

Rather than sacrificing equity for growth, we must unlock the full economic potential of all our citizens, by taking advantage of the city’s power as an institutional investor to encourage the progressive representation of workers in our commercial relations. All of this promises to help make our city affordable and reduce our tax charges.

All this should not deny that the robust taxation of wealth remains essential to build an affordable city. But while we tax the rich, we must strategically deploy these income to fundamentally move their excessive grip over our economy, promoting a really democratic and sustainable future for all New Yorkers.

Wortel-London is a researcher in public policy and assistant professor guest of history at the Bard College. He is also the author of “The Menace of Prosperity: New York City and the Struggle for Economic Development, 1865–1981”.