Call me a Pollyanna, but I can’t help but see a hopeful irony in the voter revolt of 2016. Even as the electorate rightly growled about the lack of good jobs, fair trade rules, income inequality, and other measures of economic fairness, economic seeds were germinating across the globe that could go a long way toward addressing their complaints.
Throughout 2016, the news was full of initiatives—some pilot-scale, others decades-old (but little known)—that suggest that creating fairer and greener economies is a real possibility. My wish for 2017 is that initiatives emerging last year will expand and mature into a different way of understanding ourselves as economic actors.
Here are a few of those inspiring advances:
The city of New York announced in January that the number of worker cooperatives citywide nearly doubled in just a year, from 23 to 44. Worker co-ops have much to offer to a disenchanted electorate: as democratically run firms, the co-ops give employees extensive power over working conditions and production processes, and, importantly, the workers receive a share of company wealth. And many co-ops prioritize green practices: in Cleveland, Ohio, members of the Evergreen Cooperatives include a renewable energy firm, an inner-city vegetable business, and a laundry serving the city’s huge healthcare providers. All of these use sustainable practices in their operations.
Although worker co-ops have been around for decades, most are small and constitute a tiny share of all businesses. But not all: the Mondragón group of cooperatives in Spain boasts 74,000 workers across 261 co-ops. Founded in the 1950s, Mondragón is an unparalleled example of long-term worker co-op success. Even its failures highlight the benefits of a co-op: when appliance maker Fagor Electrodomésticos Group—a Mondragón co-op that fell victim to the 2009 recession—went bankrupt in 2013, Mondragón announced that it would relocate the workers to its other co-ops to the extent possible. For those not relocated, it would pay 80 percent of their salaries for two years, an extraordinary benefit financed through Mondragón’s own internal insurance company.
What angry worker would hesitate to get behind this?
Guaranteed Basic Income
The Canadian province of Ontario declared in November that it will begin a pilot project in spring 2017 to provide a test group of citizens with a basic income of $CAD 1,320 per month. Another Canadian province, Prince Edward Island, has also taken steps toward a basic income for all. And while Swiss voters rejected a basic income proposal in 2014, many others are sniffing with interest in testing the concept:
- The city of Utrecht in the Netherlands announced plans for a basic income experiment in 2017. This was followed by expressions of interest from 30 other Dutch cities.
- Finland is starting an experiment with 2000 people, each of whom will receive $587 per month.
- In Kenya, an organization called Give Directly says it plans to give 6,000 Kenyans a basic income for at least a decade, to test the impact of long-term income security.
- In the city of Oakland, California, 100 families will receive between $1,000 and $2,000, for a 6-to-12 month period, as a prelude to a longer-term experiment over a larger area.
The idea is promoted by an unusual set of allies that represents angry voters of all political stripes. Progressives point to the possibility of mass worker displacement as automation eliminates the need for human labor (for example, driverless vehicles could idle today’s drivers of long-haul trucks, delivery trucks, buses, and taxis). Conservatives see cash grants as a more efficient way to manage welfare programs than using large bureaucracies. And both sides claim that a guaranteed basic income would provide a measure of stability and dignity to all that could advance individual and community development.
Opponents, too, span the political spectrum. Some conservatives see guaranteed income as a disincentive to work. Progressives worry that it could become an excuse to dismantle state-run programs for the poor, leaving poorer citizens worse off than they are today. But with adequate safeguards—guarantees of health care and education, for example—pilot programs of guaranteed income seem a promising avenue of exploration that could ease the economic anxieties of today’s stressed voters.
The Commons Sector
You may wonder how a basic income could be funded. One answer might come from the commons sector, especially from arrangements like the Alaska Permanent Fund. In the 1970s, Alaska, a politically conservative state, decided to designate its mineral endowment as the patrimony of all state residents. Using royalties and fees collected from the exploitation of minerals, especially oil, the state created an endowment for residents, complete with annual dividend payouts to them. The Fund, now valued at more than $55 billion, announced a record dividend of $2,072 to each qualified resident (nearly every Alaskan) in 2015. That’s a welcome cushion to state residents living on the economic margins.
But communities don’t need lucrative resources like oil to adopt a commons approach to resource management that benefits a broad base of citizens. Consider Barcelona, Spain’s, “superblock” effort to curtail car use and promote citizen development of streets and squares, effectively reclaiming common space for city residents. The effort was recognized in 2016 by the Clinton Foundation for the sharp reductions in air pollution that are expected to result.
Or look at Guifi.net, a broadband network that Barcelonans have developed as a collective good. Participants create a “network of networks” by contributing their own hardware and connections, and they manage the network as a common resource, increasing the efficiency of input use. Pricing is based on the cost of the system, rather than on a market-determined rate. Begun in 2004, the network has brought wi-fi to residents who lacked access to it. More than 32,000 active wi-fi nodes are part of the system, which now extends beyond Barcelona to other cities in Spain.
In December 2016, Portugal announced plans to experiment with participatory budgeting at the country level, the first nation to elevate the practice from cities to an entire country. Participatory budgeting gives citizens a voice in shaping government programs or projects and in determining how a share of government funds will be spent. The practice dates to 1989, when it was introduced in the city of Porto Alegre, Brazil, and has since spread to an estimated 2,700 cities worldwide.
Now, Portuguese citizens will have a voice in the national budget and can even use ATMs to vote on budget proposals, reinforcing Portugal’s reputation for innovation in the field. Lisbon has pushed the envelope in its practice of participatory budgeting since 2008, communicating its efforts broadly, making citizen decisions binding (as opposed to advisory), allowing citizens to rank proposals, and enabling enacted projects to evolve over time.
The advance could go a long way toward empowering today’s angry citizens. Graça Fonseca, the minister responsible for Lisbon’s initiative, justified it this way: “[Y]ou have a huge deficit of trust between people and the institutions of democracy…. We need to build that trust and, in my opinion, it’s urgent….”
The implications of participatory budgeting are potentially huge for efforts to create economies that are socially and environmentally sustainable. For example, as participatory budgeting in Porto Alegre grew to 40,000 participants in less than a decade, it helped prioritize the adoption of sewage and water connections in the city, which grew from covering 75 percent of the total population in 1988 to 98 percent in 1997.
A Smorgasbord of Options
These news-making innovations are just a few of the creative economic advances percolating worldwide today. Indeed, the array of options for building sustainable economies is broad, as noted here, here and here. So powerful are these economic levers that, taken together, they arguably constitute the fastest path to socially and environmentally sustainable societies. Political leaders seeking real well-being for angry voters—and a leap toward sustainable economies—would do well to study and promote these innovations in this new year.
Gary Gardner is Director of Publications and Senior Researcher at the Worldwatch Institute.