Building a Sustainable Economy
Editor’s note: Marcin’s post is very relevant as the world seeks an alternative to the current disaster of globalisation.
Tiger’s nest in Bhutan
Photo: Thomas Wanhoff
In 1994 the government of Haiti lifted tariffs and allowed imports of cheap, subsidized rice and other crops from abroad. This policy was recommended by the International Monetary Fund and urged by the U.S. government (1). Over the years this tiny change in policy led to an estimated 830,000 job losses, it damaged food security and rural livelihoods, and eventually led to food riots and hunger in 2008 (2). If people in Haiti were to decide by themselves on their country policy, would they choose the recommendations of the IMF that brought them into starvation? Would people of Ecuador allow toxic pollution in the Amazon for the sake of Chevron Texaco profits? Would people in India accept genetically modified seeds of cotton that caused crop failures, spiral of debt and hundreds of farmer suicides? And would people in the USA support bailing out banks with their own money in a way that is not transparent and does not lead to the recovery of the financial system? They wouldn’t. These things happen around the world because we still don’t have true democracy, where people set the rules for themselves.
Women sowing rice in India
Photo: Michael Foley
In 2001 twenty subsistence farmers, small traders, small food processors, and consumers, mostly women, and some of them illiterate, met in Indian village to decide on the future of agriculture in the state of Andhra Pradesh. They were chosen to represent the rural diversity of their state. They were presented with three different models of development. The official plan, put forward by Chief Minister of the state, was backed by grants and loans from the World Bank and the UK government. The plan was to mechanize, consolidate and genetically engineer agriculture of the state to produce cash crops for export, and to reduce the farming population from 70% to 40%, to have more workers for industry. The second vision involved developing environmentally friendly agriculture to produce cheap organic products for domestic and Northern supermarkets and it was supported by the International Federation of Organic Agriculture Movements and the International Trade Center. The third vision was influenced by Gandhian and indigenous ideas, and involved increasing local self-reliance and sustainability in both agriculture and economics.
Each model was illustrated by videos, farmers and traders could hear the summary of the policies, ask questions, consult with government officials, scientists, corporate and NGO representatives from the state, national and international level. They also considered advantages and disadvantages of each vision, based also upon their own knowledge, priorities and aspirations. After one week they made a decision.
Tom Atlee writes:
In their recommendations (…) they said they wanted self-reliant food and farming, and community control over resources. They wanted to maintain healthy soils, diverse crops, trees and livestock, and to build on their indigenous knowledge, practical skills and local institutions. They wanted to maintain the high percentage of people making their livelihood from the land, and did not want their farms consolidated or mechanized in ways that would displace rural people. Most of them could feed their families through their own sustenance farming. They did not want to end up laboring in dangerous brick kilns outside of Hyderabad, like so many who had left their farms. They also rejected genetically modified crops and the export of their local medicinal plants. (3)
If we wish to make some meaningful changes in the world, we need appropriate tools for that. A number one tool in the earth repair workshop is community-based democracy. It is a key for unlocking the potential for sustainability. In most cities in the world we choose our representatives to manage them. They decide on our behalf what the taxes will be spent on or what new investments will be made. It may work well, it may be a disaster. However, we can make these decisions directly together, as a community. We can meet, discuss, consult with experts and decide ourselves what the future of our city or village will be like.
What can we decide about? We can make decisions regarding all the issues that are relevant for a municipality. We can set the priorities for the budget spending, plan the new investments, hire personnel, decide on the level of their salaries, give permissions for private infrastructure investments, set local taxation and monitor the work of the city council. In some countries municipalities can even write their own local law. It is very important to understand that it is the citizens who employ the city council and the whole administration, not the other way around. They are all our employees, we hire them! If you live in a democratic country it is already written in your constitution. We employ the local administration to help us manage the issues of a city or a village, and with a community-based democracy their jobs is to put our decisions into practice.
In democratic countries collecting taxes is nothing but a fundraising event, which aim is to gather money for the projects for common good. There is no reason why we shouldn’t have a say in what our money is spent on. And, even if we spent these funds on exactly the same projects as the city council, thanks to community-based democracy we could gain something more, something that otherwise may have not appeared – a sense of a common cause, a united action that brings people together, that can create a feeling of “us” – a real community. In the same city there may live people who share the same interests, who could be friends, yet, they usually don’t have the opportunity to meet each other. With community-based democracy this opportunity is created. People meet and talk with each other and that is a great benefit by itself.
Community-based democracy could be useful also in taking decisions on state-wide issues. It could work exactly the same as with decisions on local matters. People meet, discuss, consult with experts and talk to other communities to see what their opinion is like and why. After final discussions in communities people vote, votes are counted and decision is made, directly by the people. Currently there is only one country where people vote often in state-wide referendums, and that’s Switzerland.
How do you get started?
You need to check the constitution of your country first. In our Polish constitution we have an article that says that our country is a common good of all people and that people can govern it directly or indirectly through their representatives. If you have an elected government, then it all should be fine, as somewhere in the constitution it is written that power in your country belongs to the citizens. Then, you need a city council that will listen to the people. They need to agree to accept the decisions of the citizens taken in meetings. From the legal perspective these meetings can be regarded as a public consultation event, with a small difference – according to an informal agreement between citizens and the city council, decisions taken by the citizens are final. Most probably it wouldn’t require any initial changes in law. Participatory budgeting, which is a form of community-based democracy, has already been introduced in Brazil, Ecuador, Spain, France, Germany, Colombia, Portugal, Italy and the UK among others.
Parkowa Street in Sopot, Poland.
Photo: Marcin Gerwin
Next, talk to your friends or people who you think might be most interested in a community life. The process of starting a community initiative has already been designed by the Transition Towns initiative and you can learn a lot from their experience. What you need at the beginning is a steering group which should be designed for its demise from the outset. The steering group is the ignition and the catalyst of the process, it is the group of people that organizes the community meetings and awareness-raising events. If you are already involved in a Transition initiative, then community-based democracy could be a practical extension pack for you. Community-based democracy can release the budget of your community and redirect it towards sustainability. If you would like to start an initiative for community-based democracy from scratch, then you don’t need to worry about establishing an organization. When I was asked if our initiative in Sopot is an NGO, I answered “No, we don’t need to register an NGO. We already have an organization and it is called a municipality of Sopot. We have more than 39,000 members and a yearly budget of around 60 million USD.” It’s just that people are not aware of that.
How do we plan to change the way our city is governed? In 2 years we will have new elections for the city council. We will ask the candidates for the mayor, if they would agree to accept the decisions made during the community meetings. If yes, then we will vote for them. If no, then we will not vote for them. If the situation gets desperate you can always have your own candidate, but it is important that the initiative for community-based democracy is not run by a political party, but by a movement. Will we succeed? I don’t know. It all depends on how many people will decide to participate directly in community life. But we will try.
How you organize the process of decision making in your community, depends entirely on you. We plan to use Open Space Technology for running meetings and setting the agenda and the KJ method for selecting priorities for the budget. In some cases formal voting may be necessary, in others consensus can be made. The city of Porto Alegre in Brazil has 20 years of experience in participatory budgeting (830kb PDF), so you can find out how they designed their process of managing the city budget.
The next step is creating a common vision for the future of a city or a village. It is a good moment to learn about sustainability and to consult with experts on your plans. Citizens may not necessarily be specialists in renewable energy or in designing public transport, they may not be aware of peak oil or climate change and may plan for highways or want to build new coal fired plants. Can you make them choose sustainable solutions? No, you cannot. They are free to choose any solutions they find most appropriate. We take this risk in Sopot as well. When I told a friend about this initiative, she said: “You know, that is very dangerous. There are some guys who may want to burn down the forest in our landscape park.” In theory they could propose that. But in practice, in our city at least, the rest of the people would not let them do it anyway. So, besides introducing community-based democracy, it is a good idea to run awareness raising events and educate people about sustainable living.
Women serving torillas on a parade
in Cotacachi. Photo: feserc
The experience of participatory budgeting in Cotacachi canton in Ecuador is a very encouraging one. It is a small and ethnically diverse canton that stretches from the Andes to the lowland tropical areas. In 1996 the people of Cotacachi elected a new mayor (a native Kichwa), who introduced participatory budgeting there. People decided to use their budget to improve health care services and invest funds in education and electrification. Cotacachi was declared by UNESCO the first illiteracy-free area in Ecuador and the quality of healthcare is one of the best in the country (4). All people are invited to take part in the planning process, regardless of age, gender or ethnic and economic background. They decide on the use of 100% of investment resources. Decisions are made after meetings in the working groups that focus on health, education, tourism or children and youth issues. In 2000 the people of Cotacachi decided that they would like to live in an ecological canton, the first of this kind in Latin America (5).
The advantage of this system of governance is also that there is no conflict of political parties, there are no clashes for votes between left and right. We, the people, have already won the elections. No one is going to throw us out of the office in 4 years. We don’t need to prepare for the next elections. We are already there. We can sit down and decide what is best for our communities.
It seems to me that community-based democracy could fit very well with Transition initiatives. Democracy can provide involvement of the whole community, funding and a real influence on decisions made, while the Transition approach could provide a direction – sustainable living, adapting for peak oil and localizing economies. Democracy alone is not enough to create a sustainable world, we need a clear direction to understand where we would like to get to, and Transition initiatives provide just that.
When you have a community-based democracy in your city, or better in the whole country, then you can start changing the economy. It is vital that localizing and greening the economy is not imposed on people, but instead, it is something they choose themselves. Sustainability is not an abstract idea that only environmentalists can comprehend. It is just common sense, based on the understanding of how nature works. You don’t need a Ph.D. to get it. If you cut trees in the forest faster than they can grow back, sooner or later the forest will be gone. A child in a kindergarten can understand that. Adults can understand it as well and what’s more, they can do something about it. Yet, sustainability is not just about survival and living within the limits of our environment. It is about maximizing happiness, about flourishing communities, thriving nature and a wealth of natural resources.
We need to redesign our economies in a way that we will be able to feed ourselves with nutritious and healthy food, provide clothes, housing, clean water and a good life for all 8 billion of us in the next 20 years. That’s quite a challenge, but it is doable. It is doable if we have a real democracy. If we don’t, then the corporations and politicians may successfully defend the global market economy. If you have real democracy, than people can pass the law that is in the interest of their common good. They start to think about the economy, about what is really best for them and, I hope, they start to act responsibly, if they are told what the environmental consequences of their actions are and what impact it will have on their future.
The way the economy works, the very economic model, has an influence on human relations and the environment. Modern capitalism, for example, is based on self-interest. As Adam Smith points out: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Another important feature of capitalism is competition in the free market that is supposed to keep the prices low and provide an incentive for innovations. Hmm, since everyone is concerned with their own interest, then how can capitalism help to create healthy communities where people help one another? The answer is: it can’t. That’s just not what it was designed for. It was designed for increasing profits and minimizing costs for the companies, while the invisible hand of the free market was supposed to help the rest society to improve their material standard of living. Unfortunately, the struggle for profits encourages polluting the environment to keep the costs down and saving on work conditions. There is no doubt that capitalism can increase Gross Domestic Product fast. But it does so at the expense of social life and the environment. Yet, ever increasing GDP doesn’t have to be the aim of the country’s policy anyway. How about a good life instead? In Bhutan the national policy is focused not on GDP but on GNH – Gross National Happiness.
McDonald’s in Tokyo
Economic globalization, which is associated with modern capitalism, didn’t happen by chance, it is not unavoidable, as if it was winter or gravity. Economic globalization was designed at the end of the World War II by US planners and it was officially launched with the international conference in Bretton Woods in July 1944. The main objective of the design was to allow US corporations to enter foreign markets and to allow US control over the world economy by removing trade barriers, allowing free exchange of currencies and setting up a system of fixed exchange rates that would minimize the risks involved with exchanging foreign currencies. Over the next years three institutions were established: the International Monetary Fund, the World Bank and later on the World Trade Organization, and their job was basically to enforce free trade rules in as many countries around the world as possible and to dismantle local self-sufficiency. Governments that didn’t want to cooperate were encouraged in a more informal way, which is described in a book written by John Perkins “Confessions of Economic Hitman”. Economic globalization can be reversed with a simple flick of a pen, if people decide to raise tariffs on imported goods.
Socialism, as it was experienced in Eastern Europe or in Soviet Union, has many flaws as well. First of all it was not a democracy. Even now, there are no free elections in Cuba nor in China. There is no free press nor freedom of speech. The country is not run by people, but by an authoritarian government, which cannot be changed after 4 years. Common ownership of resources is good, but in a classic socialist country, “common” doesn’t mean that it belongs to people. It belongs to the government. If a factory is run by state, than in practice it means that it belongs to no one, and if the workers get paid, they don’t really care what they produce nor if the quality of what they do is good. The manager may be incompetent, but he is a friend of the Minister, so he gets a job. There is no direct public oversight of the commons. The country is vulnerable to corruption and cronyism. Bureaucracy is rampant. Not so cool.
La Paz, Bolivia.
Photo: Jessie Reeder
Socialism, as it is emerging in Latin America, in Bolivia, Venezuela or in Ecuador, is different. There are free elections and people can influence policies in some ways. Public participation was allowed, for example, in Ecuador in 2008 when a new constitution was drafted. More than 3,500 organizations presented their proposals to the assembly, and thousands of public meetings were held in schools, universities and communities to decide what the new constitution should include (6). Whether these new forms of governance in Latin America will be successful, depends very much on how much public oversight will be agreed upon – in other words: how democratic these countries will be. If in Bolivia, for example, the state decides to run a gas company, who will hire the manager? Who will monitor the company’s performance? Will people be able to fire the manager at will, if they decide he is not doing his job well? Who will decide about what the revenue of gas sales will be used for – the people or the government? If people, then they may use it well. If the government, then these funds may be used for buying votes or for funding projects that people don’t really need.
Do we have other choices besides capitalism and socialism? We sure do. Just what’s important to remember is that both capitalism and socialism may be very different from one country to another. Capitalism in Sweden, for example, with public healthcare, public universities and very high taxes is not the same as capitalism in the USA. The economic model of Sweden is still capitalism, but it is different from the latest US version, because the state budget in Sweden is used to help people rather than to support corporate gains.
Prayer flags near Leh in Ladakh
OK, but what if we wanted to create a society based on cooperation and sharing, rather than on self-interest and competition. Could it work? Of course, it did work for thousands of years in traditional communities all over the world, in communities of the Yanomami Indians in the Amazon, in Ladakh in the Himalayas, among the San Bushmen tribes in South Africa or in traditional Aborigine tribes in Australia (7). Economy based on sharing is also present in the industrialized countries now, and it is, for example, open source software (Linux or WordPress), open encyclopedia (Wikipedia), posting scientific research on the internet, voluntary fire brigades, food banks where people donate food or even uploading photos on Flickr with a Creative Commons license. The formal name for an economy based on sharing is a gift economy. Its taste is very different from capitalism.
In many cultures people still work for free for the common good or simply to help their friends. In Ecuador, when people in the Indian communities meet to accomplish some task together, like weeding a garden or cleaning around a school, it’s called “minga”. In Sri Lanka, when people meet to build a road or a new well, it’s called “shramadana” – a gift of labor. A whole network of 15,000 villages, where people work together on various projects for the benefit of communities, has evolved there (it’s called Sarvodaya Shramadana). And when people in the cities in Australia meet to establish a permaculture garden, share skills and have fun, then it’s called a “permablitz”. All of these are forms of a gift economy.
When designing an economy in your area, you can choose elements of any economic system and mix them as you please. For example, you can have a communal forest in your village, but keep private housing (some tribes in the Amazon live in long communal houses). You may have a communal garden, gather food and cook meals together, but sell ginseng from this garden as a cash crop to the pharmaceutical company 100 miles away. You can also trade without money exchanging goods and services directly (barter) and, for example, you could supply fresh salads to the urban community in exchange for dental care. You can have a free market, but set caps on companies so that they stay small and share the market with each other rather than compete endlessly for customers, and besides that promote cooperative ownership by special taxation or financial incentives. Corporations could be given charters for one or two years for activities, that could be renewed if necessary, and their stakeholders could be directly responsible for any corporations’ wrong doing. Not all things can be produced locally, like hard disks or cameras, and in some cases a big producer could be an advantage.
You can also choose a cooperative economy, where people decide on what needs you have and then share responsibilities – who does what – grow food, cook, teach in school, run a kindergarten. It’s teamwork. A good example of a cooperative economy is Gaviotas, a village on the Colombian savanna. The economic model you choose depends on the personalities of people living in your community. It depends on how much individual and how much community life you would like to have. You need to talk it all over together. Don’t push it.
Let’s imagine a community that decided to begin a transition to a sustainable economy. They have just voted for a community-based democracy, they have mobilized more than half of their citizens and now would like to plan their budget expenditures. What can they do? What can they spend their money on? Boy, this is an exciting perspective! There are so many things you can start in just one year! After many meetings, discussions, community parties and consultations with experts, people decided on the following: they want to have their local currency to keep the money circulating in the local economy and they want their own bank that will issue this currency and provide credit at a 0% interest rate. This bank will also be able to issue credit in the national currency, however, since it is owned by the community, it will keep the credit rate at the minimum level and provide credit only for investments that are agreed upon by the community. The maximum amount of credit available per person was set to keep the inflation down and consumption at a sustainable level. Local currency is a top priority in this community due to a high unemployment rate, and equally important is access to land.
The municipality owns several hundred acres of agricultural land that is not privatized. This land is leased to citizens who want to grow their own food in exchange for land stewardship and supplying part of crops for school meals. There are more people willing to have a garden than land available, so 40 more acres were bought with the money from the city budget. Contracts have been also made with local farmers to supply various vegetables, fruits and grain to city shops. A discussion sparked about how to manage distribution of this food and it turned out that it was easiest to work together with local grocery stores, rather then to built a special warehouse.
Bicycle hire system in Paris
(Velib). Photo: Filo.mena
Two buses with electric engines were ordered from the factory (there was a long waiting list, so they will arrive one year later) and a credit line was opened for cab drivers who wanted to exchange their internal combustion engines for electric ones. A car sharing club was established with just 4 cars for a start and a public bicycle hire system. To provide clean electricity a plan for a transition to completely renewable sources of energy was developed in 6 months, and the purchase of the first vertical wind turbines, photovoltaics and small hydro generators was scheduled for the next spring. Since it was the citizens who managed the municipality there were no problems with obtaining permission for placing them. All large generators were to be owned by the community and electricity was to be sold at the cost of maintenance.
Vertical axis wind turbine installed in London
A local law was passed to allow reuse of grey water in gardens and the use of compost toilets. All food scraps were to be collected, composted and sent back to farms and gardens. Environmental standards were set for all new buildings, and from now on only passive houses were allowed to be built in this municipality. A large sum was designated for insulating school buildings and installing solar collectors for water heating, but it was calculated that increasing energy efficiency will eventually bring yearly savings in heating. People in this city also decided that they would like to help other communities around the world, especially in developing countries, so they earmarked part of the budget for this purpose. In the first year they have chosen to support organizations that teach people how to establish forest gardens in tropical countries, how to purify water using plastic bottles placed in the sun and those that promote family planning in poor districts.
How does it happen that one company that makes carpets cares about the environment, uses recycled materials, reduces its energy use and cares for its employees, while the other dumps toxic waste to the stream, pays such meager salaries that people hardly make ends meet and burns tons of coal without any thought about climate change? How is it possible that in one community meetings are peaceful and people manage to find solutions that can be accepted by all, while in the neighboring community, just 10 miles away there are always conflicts, people are divided and everyone sits on the meetings with arms crossed? There is a magic ingredient necessary for the community and environmental projects, one that makes their success possible. It does magic, because it makes people listen to and help each another, it makes people plant trees or work to save humpback whales. Do you know what that magic ingredient is?
- Haitians blame U.S. for food shortages, Marketplace, American Public Media, http://marketplace.publicradio.org/display/web/2008/05/08/haiti_food_crisis/, accessed on 01.02.2009.
- Hunger in Haiti, photo gallery, Guardian.co.uk, http://www.guardian.co.uk/world/gallery/2008/jul/22/haiti?lightbox=1, accessed on 01.02.2009.
- Tom Atlee, “Tao of Democracy”, Chapter 13.
- Tatyana Saltos, “The Participatory Budgeting Experience: Cotacachi – Ecuador”. See also: “Interview with Leonardo Alvear: Participatory Democracy Part I, Cotacachi’s Participatory Democracy Revitalizes Politics in Ecuador”, http://www.pro-ecuador.com/participatory-democracy.html and “Cotacachi Democracy in Action: Choosing Good Health”, http://www.pro-ecuador.com/Cotacachi-democracy.html.
- Environmental Management Intersector Committee, http://www.cotacachi.gov.ec/htms/eng/asamblea/nosotros.htm, accessed on 28.01.2009 and The Rainforest Information Center, http://www.rainforestinfo.org.au/projects/anja/anjacoto.htm, accessed on 28.01.2009.
- Helga Serrano, Eduardo Tamayo, “Change Triumphs in Ecuador’s Constitutional Referendum”, Center for International Policy, http://americas.irc-online.org/am/5571, accessed on 02.02.2009.
- See: Helena Norberg-Hodge, “Ancient Futures”.