3.4 Economic policy

3.4.1 Some definitions

To clarify some of the implications for political-economic policy of green social democracy, let's begin with some definitions and associated claims that make explicit our point of view. The reader may then better understand and without ambiguity what some of the implications of green social democracy are for political-economic policy and practice. 

Economics is understood by us to concern the production and exchange of goods and services. In every contemporary society – and probably all societies that have ever existed - the economic system is a rule governed one. The concept of a spontaneously created economic system, functioning free of regulations and laws, independent of any form of government, is a myth, at odds with the very existence of human society. Implicit, if not always explicit in the policy aims we have identified with green social democracy are changes in the rules from those that have legitimated capitalist practices. 

Democracy is understood by us as a form of government in which those who make the rules and regulations are the people themselves or representatives accountable to and instantly recallable by the people. It does not necessarily follow, of course, that every historically existing system that has described itself as democratic meets this standard. For example, it is not the case that every adult resident of past and currently existing capitalist democracies has had a vote, nor that each vote has had equal weight in the deliberations of capitalist electoral democracies. The entire recorded history of class societies provides no examples of an electoral democracy in which such a high standard has been met. Most egregiously, those democracies that permitted slavery thereby excluded slaves from the democratic process. Until recently, there were minimum property qualifications for voters in at least many capitalist democracies. Nor, until the twentieth century, did women have the right to vote in these democracies. 

Even today, most - if not all – self-declared capitalist democracies exclude non-citizen immigrants from voting, notwithstanding the requirement that they pay the taxes and obey the laws set by the elected bodies. Even those citizens who do vote cannot count on their vote translating into an equal weight in deliberations so long as proportional representation is not required and there are insufficiently strict limitations on the permissible role and influence of corporations and wealthy individuals over elections and government officials. On top of these problems are ongoing efforts at voter suppression by some ruling parties, that is, efforts to erect barriers to the electoral participation of sections of the population that can be expected to vote in opposition to the parties in power. It is for these reasons that we occasionally qualify our intended meaning for green social democracy as a "radical democracy" in relation to the more limited practices of capitalist democracy. 

Social democracy, as distinct from other forms of democracy, is in our usage of this term a form of government in which everyone has an equal say in the decisions that affect their lives, including those economic decisions routinely made behind closed doors by the owners and managers of capitalist businesses and, when they can get away with it, by their political representatives in government. Social democracy, in our use of this term, means democracy in government and at work in relation to all policy decisions and practices that affect the well-being of those within their respective orbits. Given that no class society has yet reached that standard, social democracy is better understood as the intention to move capitalist societies in that direction. 

Green social democracy is meant to convey the concept of a political movement that gives equal weight to the aim of achieving a social democracy and the aim of achieving a sustainable society in a healthy natural environment. Implicit is the view that social democratic and green objectives are only obtainable together, both as a practical matter and as a moral responsibility. In the authors' opinion, this is an emergent phenomenon, the one that will increasingly define the twenty first century. Purely green movements and purely social democratic ones are being and will be further replaced by the hybrid of the two. 

In a democracy, whether a capitalist democracy or a green social democracy, the exercise of economic and political power by some over others matters to those who are excluded. Those with greater economic or political power can usually find ways to use that power to have a greater say over the laws and regulations that govern society. This power of the wealthiest or most politically influential over society is most effective when it is obscured, that is, when people can be persuaded that the representatives of the wealthiest or most powerful are acting on behalf of everyone. Some of these representatives may hold this belief themselves. 

Whoever wields political power is in a position to shape the laws and regulations governing the economic system so that it favors their own economic or hegemonic aims. By definition, in a green social democracy those who hold power would be the people themselves and the aims of government would be their own. In a capitalist democracy, these are the aims of the capitalists (and not, for example, the aims of the property-less). In an oligarchic capitalist democracy dominated by too-big-to-fail private-for-profit corporations, these are the aims of the ruling capitalist oligarchy.

Nor do the self-described socialist governments of the twentieth centuries and most if not all of the political movements that name themselves socialist or eco-socialist at the present time represent green social democracy by our definition. Their commitment to centralized planning, where they serve or envision themselves as the planners and deciders is an evident hangover from capitalist authoritarian culture and a highly effective barrier to government of, by and for the people themselves. 

Green social democracy, therefore, also means the expectation of full transparency in all decision-making and policy implementation of governments, businesses and their officials and employees. This transparency includes public access to the meetings, records, books, and communications of government and business organizations and officials related to governmental and business decisions and actions. 

Not only would whistleblowers and organizations (such as wikileaks) be honored individuals and institutions in a green social democracy, any government or business official found to be withholding relevant information from the public, placing obstacles to access to information about their plans and activities or retaliating against whistleblowers would be subject to civil and criminal prosecution, the severity of which should correspond to the public interest in having the information. Whistleblowing in a green social democracy would be every individual's civic responsibility. Withholding relevant information from the public would be a crime. 

The issue of transparency, however, just begins to address the obstacles to an open and honest accounting of the way a system functions. In correspondence with one of the authors, 14 November 2011, Janice Harvey added the cogent observation: "The dominant economic paradigm of economic growth is ascribed to by a wide range of opinion leaders and the general public, and governments of all stripes are committed to that single goal above all others. So the broad consent of society and its leaders on this point gives life and breath to the corporate agenda. Corporate interests (profit maximization) and government interests (GDP growth) are two sides of the same coin."

In broad outline, then, here are the main inherent political-economic policy goals of a green social democracy:

3.4.2 Economic policy goals of a green social democracy

*Social Democracy: A government of the people, by the people, for the people, functioning in relation to all decisions with societal implications, including fundamental economic policy, a government in which everyone's voice counts, in which civil rights and the rights of minorities are actively protected and where there is full transparency with respect to government and business decisions and actions affecting the public interest.

*Development: The right and obligation to make a useful, productive contribution to others and to share in the results, beginning with the satisfaction of the basic needs of all, the sharing of the commonwealth inherited from nature and from the past creative activity of previous generations and continuing with the opportunity to contribute to and share in the highest attainable quality of life. 

*Environment: The social obligation, to which each person and each economic unit contributes, of restoring and maintaining a healthy natural and social environment for the benefit of all current generations and passing on to future generations one that is at least as rich in diversity and ability to provide for high quality human life and well-being as the one we inherited. 

A similar alternative economic policy is argued for passionately by David C. Korten (2010,Berrett-Koehler Publishers) Agenda for a New Economy: From Phantom Wealth to Real Wealth. He has identified Wall Street as the principal culprit - one that needs to be removed from the economy, and ecological balance, equitable distribution and living democracy as core elements of an alternative to the political economy delivered by Wall Street. He favors an economy rooted in small local businesses with encouragement to cooperative, worker and community ownership. Korten's vision is, at the least, very close to the green social democratic one advanced in this work, which we believe is characteristic of the emergent people's anti-capitalist movements. In this melding of the green and social democratic movements of the people, green social democracy necessarily means the primacy of the interests of working people and the communities in which they live over any narrower interests that private-for-profit business might have, whether large or small. In a green social democracy, business charters, laws and regulations would require that businesses function in the public interest to fulfil the identified needs of the people, as democratically determined. Not-for-profit worker cooperatively managed and operated economic units would be favored over private-for-profit businesses by public policy, with the former alone receiving support from local community, state and federal public banks. Taxation policies would ensure just distribution of income, including progressive taxation and limits on personal disposable income. Workplace democracy and the dignity of working people would be protected by law, including the right to organize without interference by employers in any economic unit not already cooperatively managed by its workers. Serious infringements of the human and civil rights of working people, today commonplace in workplaces without strong unions supported by equally strong and enforced legislation, would be punishable through the legal system with employee's legal costs covered by the people and recovered from employers found to have infringed labor rights or environmental laws. Employers found in serious violation of labor or environmental laws might be punished by actions up to and including the withdrawal of their charters and the transfer of their assets to their employees, who would be given the right to cooperatively manage these assets in the public interest. 

In contrast, here are the inferred economic policy goals of oligarchic capitalist corporations and their representatives: 

*Plutocracy: The visible signs of which include:

 

  • Increasing income and wealth inequality; 
  • Increasing concentration of corporate power; 
  • Increasing socialization of corporate risk;
  • Increasing privatization of all possible profit sources;
  • Subversion of democracy.

 

*Casino capitalism: In which 

 

  • Financial speculation trumps community development;
  • Opportunities for wealth accumulation (for some) count more than opportunities to work and enjoy the fruits of their labor for all;
  • The present is purchased at the expense of the future;
  • The creation and use of means of destruction counts as economic growth.

 

*Environmental destruction: The visible signs of which include the treatment of our common home, planet Earth, as a dispensable resource and a sewer for waste disposal.

3.4.3 Prioritizing the global commons

Highlighting the contrast between existing capitalism and the alternative of a green social democracy is the commitment of the latter to the expansion over time of the commons (here broadly defined as all of nature, all the knowledge and past achievements of human culture, all technology passed down from prior generations, and all the natural and human built spaces needed for public use) at the expense of private-for-profit economic property, until such property ceases to exist. 

First, though, let us focus on its opposite.

Property rights: private versus public

In the pervasive neoliberal version of capitalism described above (the only version now on offer and perhaps even possible), the rights to private property are primary, which leads to increasing concentration of property in fewer and fewer hands, ultimately reducing public spaces to an absolute minimum. This is a consequence of the legal duty in the case of corporations and the legal right in the case of individuals to give priority to capital accumulation. The drive to capital accumulation defines capitalism. It is its essence. It is a system characterized by exclusion.

In a Brief History of Neoliberalism (2005, Oxford University Press) David Harvey concludes that the neoliberal regime of rights, identified by him (p2) as secure private property rights, free markets, free trade leaves "no alternative except endless capital accumulation and economic growth no matter the social, ecological, or political consequences… the neoliberal regime of rights must be geographically expanded across the globe by violence (as in Chile and Iraq), by imperialist practices (such as those of the World Trade Organization, the IMF, and the World Bank) or through primitive accumulation (as in China and Russia) if necessary. By hook or crook, the inalienable rights of private property and the profit rate will be universally established" (p181-2).

Market economies and land 

Philip B. Smith & Manfred Max-Neef (2011, Green Books, Economics Unmasked p.116) remark in a similar vein that "nature has an infinite number of dimensions, only one of which can be bought and sold. Land can in no way be considered a marketable quantity, simply because it is not produced by humankind to be sold, nor will the amount increase if the price per hectare rises, or diminish if the hectare price goes down. It is the heritage of all humankind today, and of future generations tomorrow. It cannot be ‘owned', any more than one can own the stars, the sun and the moon." To land, one might add air and water. They credit Polanyi, who "foresaw what the land market would lead to" citing Polanyi's observation that "nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military security jeopardized, the power to produce food and raw materials destroyed." Karl Polanyi (1994, Beacon Press) The Great Transformation, p77.

Now let us return to an alternative direction to that of unending privatization.

Building a commons sector 

Peter Barnes (2006, Barrett-Koehler Publishers, Capitalism 3.0: A guide to reclaiming the Commons) proposes building a commons sector of the economy as a counterweight to the corporate sector, with the commons sector charged with the responsibility for passing on a healthy commons to future generations, protecting it from the predation of private interests, primarily from private for-profit corporations. His proposal, however, is limited to what can be accomplished within the United States, leaving out of consideration the global character of the Commons and the advantage which an inclusive democracy, that is a society free of political domination by private for-profit corporate ownership of property, would have in achieving the aims of a just, sustainable society. Green social democracy, as an alternative to capitalism, would ultimately mean going beyond the more limited vision of Barnes. Nevertheless, as a bridging movement within capitalism, building those institutions that serve to protect the commons is an essential part of the struggle for a green social democracy. Without some successes in protecting and building the commons sector of public parks, preserves, and protected areas and various forms of trusts with a legal mandate to protect the commons, our corporate dominated capitalist society would ultimately leave us with nothing that has not been thoroughly degraded. 

Local initiatives that Barnes identifies include:

  • land trusts, shielding pieces of land from development or degradation;
  • surface water trusts, which aim to put water back into streams, rivers and lakes;
  • groundwater trusts, protecting this major source of drinking water;
  • community gardens, giving people without their own garden space means to grow their own vegetables;
  • farmers markets, providing space for direct local sales of fresh food and other products from small scale producers;
  • public spaces, providing space for people's use within urban neighborhoods;
  • time banks, a method of exchanging services outside the money based economy;
  • municipal wi-fi, again taking access to the internet out of the capitalist marketplace.

 

Regional initiatives include:

  • air trusts, acting regionally to limit emissions of greenhouse gases;
  • watershed trusts, controlling environmental degradation within regionally controllable watersheds;
  • "buffalo" commons, providing corridors for the passage of large animals between protected areas.

 

Barnes also identifies a few exemplary national initiatives within the US as well as some of the global initiatives in which Americans participate. 

3.4.4 Further on economic policy goals of a green social democracy

It remains to translate economic policy goals into strategic policies, those key policies whose adoption would take society down the road to the replacement of neoliberal capitalism with green social democracy. The most important of these strategic economic policies are addressed in the remainder of this chapter. These include:

  1. In-roads on the path to electoral and workplace democracy, culminating in an end to societal political dominance by the largest for-profit corporations and their political representatives;
  2. Changes in the legal responsibilities of publicly traded companies from a fiduciary duty to maximize profits to increasing responsibility to the public for achieving a more just, sustainable economy, culminating in requiring all organizations participating in the economy to abide by business charters that make a just, environmentally sustainable economy the primary fiduciary duty of every economic organization and its officers, managers and representatives;
  3. Initial steps in creating public banks, culminating in the complete replacement of private for-profit financial institutions by the public financial institutions of a green social democracy;
  4. Progress in ending the taxation system as an instrument of economic wealth and corresponding political power by the wealthiest, culminating in a taxation system that serves the aims of increasing wealth and income equality and environmental sustainability.

Welcome!

This website was launched September 1, 2010 in support of a green social democratic alternative to neoliberal capitalist policy and practice. The primary result is a work by Charles and Karen McFadden of seven chapters, grouped under the title, Towards a Green Social Democratic Alternative to Capitalism available here in pdf and html formats.

Below under the heading What’s New can be found the most recent materials posted on this website, including opinion pieces, book reviews, articles and selections from the 2017 edition of the main work.  For the interest of new and returning visitors, new materials will be included quarterly.

What's New

NEW & REVISED

Authors' Preface

1.6 The epochal nature of the period we are entering

6.0 The socialism we need against the "socialism" of the 20th century

6.8 Additional concerns about 20th century variants of "socialism"

6.9 The people united!

7.1 Policy alternatives and political movements to advance them

OPINION

Charles and Karen McFadden, Is revolutionary transformation on the agenda

Charles and Karen McFaddenHumanity on the Brink

Charles and Karen McFaddenMovements of Resistance to Movements for System Change

Charles McFaddenTranslating Green Principles into Education Policy and Practice

Charles and Karen McFadden, The Role of Revolutionaries in the Labor Movement

REVIEWS

Charles McFadden, The People United for a More Just Sustainable Future

Karen and Charles McFaddenCan emergent early 21st century neo-fascism be defeated without coming to grips with late 20th century restructuring of capitalism into a global system

Karen and Charles McFaddenA Dominant Capitalism or a Sustainable Environment? Why we can't have both.

US CORNER

William I. RobinsonThe Crisis of Global Capitalism and Trump's March to War

William I. RobinsonTrumpism, 21st Century Fascism, and the Dictatorship of the Transnational Capitalist Class

CANADA CORNER

George HewisonWINNIPEG 1919 & THE COLD WAR

George HewisonArt Manuel - "Unsettling Canada

George HewisonThe NDP and LEAP

RECOMMENDED

Albert Einstein, David Swanson, Jill Stein, Chris Hedges, William I. Robinson, and others Selected articles for Winter 2018

FEATURED WORK

ECONOMICS

1.7 The dynamics of capitalism as a system and the limits of single issue reforms

2.11 The economy in transition towards a new deal for labor and the community

3.1 The challenge of a moribund economic system

3.7 Public banking: A cornerstone of a green social democracy

4.7 Economics and culture

6.5 Using the non-market economy as an opportunity to begin moving beyond capitalism

HISTORY

1.6 The epochal nature of the period we are entering

2.0 Theoretical Perspective: Defining Green Social Democracy

2.5. Socialism and green social democracy in historical materialist theory

4.3 Culture in historical perspective

5.1 Contrasting a green social democratic world with the currently prevailing, but challenged neo-liberal one

6.2 Socialism and capitalism as coexisting social systems

LABOR

2.11 The economy in transition towards a new deal for labor and the community

5.7 Defeating neo-liberal capitalism: The role of social movements

7.3 Justice: Creating a just society, based on the right of all to a dignified, secure existence

Creative Commons License

Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) applies to all work posted on this website except that which appears with authors whose last name is other than McFadden, in which case standard copyright should be assumed to apply.