Tag: finance

Who owns the Green New Deal?

“A reindeer stands in silent protest in front of a hydro power plant” on Indigenous Sámi land in northern Scandinavia. Image: Tobias Herrmann CC BY-NC 2.0

by Geoff Garver

Green New Deal? People, we have a problem. 

You go into your Wall Street investment bank and ask, “What’s a hot investment these days?”  Your super sharp investment advisor says, “Farmland in Africa! People have to eat, right? And there are more and more people. Put your money in African farmland and you’ll double your money in no time!”  She doesn’t say a word about what makes that land unique and special or about the people and other beings that live, or lived, there.

That’s a big problem. It’s a remote ownership problem. In fact, it’s a whole bunch of justice problems related to the hard-wired legacies of colonialism that come together as a multi-faceted problem about remote ownership of land and resources. In a nutshell, remote owners or rights holders often cause serious harm to far away ecosystems they know and care little about, and grave injustice to the people and other life that know those ecosystems most intimately and depend on them. 

So, what about this Green New Deal (GND)? Is it merely the old wine of capitalist growth-driven development in a new bottle, or is it a recipe for socio-political and socio-ecological transformation that will right past wrongs and reshuffle political power in favor of historically disempowered people? Any Green New Deal (GND) framed as a “just transition” has to address problems of remote ownership and empower place-based governance.

Open questions about the remote ownership problem in AOC’s GND

Some say the GND in H.R. 109 introduced by Rep. Ocasio-Cortez and others is merely a shift to green or climate colonialism, by which the greening—via decarbonization and other means—of wealthy, developed countries in a growth-driven, capitalist, and globalized world will worsen injustice in developing countries. This injustice includes not only increased exposure to environmental harms and health risks from extraction of materials needed for green technologies but also ongoing wealth inequality and social and cultural upheaval as the wealth-building potential of extracted resources (jobs, profits, etc.) is mostly exported along with them. 

The GND risks continuation of the crushing of long-standing place-based governance systems.

At the heart of this injustice are international companies and their stockholders and other remote owners—land and resource grabbers—that exert enormous political power from the local to the global scale. The GND risks continuation of the crushing of long-standing place-based governance systems, permanent displacement of people with the most intimate knowledge of local ecosystems and devastation of ecosystems and the life they support, all typical of land and resource grabbing around the world.  A particular concern is that land use reform is essential to success of the GND, yet the GND does not directly confront the hard wiring of the property rights regimes that must be addressed. Another is that the GND was conceived and announced with virtually no inclusion of Indigenous voices and that unless this lack of inclusion and the superficiality of references to Indigenous ideas is overcome, the GND could maintain “broken structures that perpetuate disconnection and individualism.”

Some cautiously, others more enthusiastically, see the GND as an opportunity to end and provide restitution for these injustices.  The openings for transformative change to scale back land and resource grabbing and empower place-based governance systems, including Indigenous ones, are signaled in support for “community-driven projects and strategies” to deal with pollution and climate change; locally-appropriate ecosystem restoration; and free, prior and informed consent of Indigenous communities with respect to matters of concern to them.  For these openings to fulfill their potential, justice activist Syed Hussan argues that the GND must foster “just transition in the broadest sense” and not just deal with displaced workers in fossil fuel industries and other discrete issues that decarbonizing the economy will entail.

Where to look for answers to remote ownership problems

The good news is that worthwhile ideas about how the GND can confront problems of remote ownership and promote locally-tailored place-based governance systems are already out there. Here are some of these sources of inspiration.

The degrowth movement. Degrowth is a forceful challenge to the growth-insistent sustainable development model, and a more hopeful approach to long-term perpetuation of a mutually enhancing human-Earth relationship. Degrowth combines a commitment to respecting ecologically-based limits with a commitment to developing a comprehensive, practicable approach to building thriving human communities based on conviviality and human solidarity without consumerism or material and energy excess. The reforms associated with degrowth “emphasize redistribution (of work and leisure, natural resources and wealth), social security and gradual decentralization and relocalization of the economy, as a way to reduce throughput and manage a stable adaption to a smaller economy.” Giorgos Kallis’s nine principles of degrowth should be useful in making sure the GND adequately confronts remote ownership problems: 1) End to exploitation; 2) Direct democracy; 3) Localized production; 4) Sharing and the commons; 5) Provision of relational goods, through friendship, love, healthy relationships, kinship, good citizenry; 6) Unproductive expenditures geared to communal activities, such as festivals, games and the arts; 7) Care, and treating humans and other life as ends, not means; 8) Diversity; and 9) Decommodification of land, labor and value.

The G20.  What?!? Well, it’s useful to understand the key ideas of the global political apparatus that must be overcome for the GND to lead to radical social, political and ecological transformation.  At annual meetings, the G20 typically agree on the need to “further collective actions toward achieving strong, sustainable and balanced growth to raise the prosperity of our people.” The means to do so generally involve supporting global trade and investment (much of which is tied to remote ownership) and the role of the World Trade Organization as a means to create jobs and maintain growth, with weak or marginal actions or aspirations to address inequalities, corruption, climate change and environmental harm.  The G20 supports the United Nation’s Sustainable Development Goals, with emphasis on sustainable, inclusive economic growth. A truly progressive GND should look past the SDGs!

The EJ Atlas.  The Environmental Justice Atlas documents real cases of how remote owners have created social and environmental conflict.  These compelling narratives are a rich resource for understanding in detail the problem of remote ownership and the power dynamics that must be confronted and reshuffled in order to overcome them. 

Indigenous ways of thinking and being. In many Indigenous worldviews, attachment to place, founded on respect for all life and for deep appreciation of a reciprocal relationship with the Earth and its life community, is key to a more hopeful vision of the human-Earth relationship. Indigenous activist Eriel Deranger writes, “It is Indigenous communities, locally, nationally and internationally, that continue to push for an actualization of instilling deeper spiritual connections to Mother Earth to help us relearn what systems of colonization, capitalism, and extractivism have severed.” Connecting or reconnecting to the places that nourish our bodies and souls is at the heart of the long-term promise of a GND done well. In Braiding Sweetgrass, Robin Wall Kimmerer writes that “[f]or the sake of the peoples and the land, the urgent work of the Second Man may be to set aside the ways of the colonist and become indigenous to place.” But, inviting settler societies to become indigenous to place—and an invitation from Indigenous holders of knowledge of a place is essential—does not mean letting them “take what little is left.” Attaching to a place by carefully and respectfully seeking to become indigenous to it requires humility above all, and it requires direct experience with wise teachers, not merely book knowledge.

Indigenous peoples and other social groups that have been historically disadvantaged by colonization and land and resource grabbing must play a central role in developing and carrying out the GND.

Six mutually reinforcing proposals on remote ownership and place-based governance for the GND

First, Indigenous peoples and other social groups that have been historically disadvantaged by colonization and land and resource grabbing must play a central role in developing and carrying out the GND. Including Indigenous notions of justice, decolonization and self-determination through meaningful inclusion of Indigenous communities in decisions that affect them, which requires adequate time and resources, is essential.

Second, the GND should empower communities like those included in the EJ Atlas to develop strong place-based governance systems and communities of solidarity and mutual care in order to resist the social and environmental conflicts they face, often because of remote ownership. This means providing them with a determinative role in decisions affecting them directly and indirectly. It also means developing a global/international scope and strategy so remote ownership problems in one place aren’t just displaced elsewhere. Also, we should look for opportunities to scale up and out from local remote ownership problems that are avoided or justly resolved.

Third, the GND should end corporate giveaways that are tied to remote ownership problems and exclude carbon markets, offsets or emissions trading regimes, and geoengineering—all of which typically pose remote ownership problems. Instead, the Climate Justice Alliance is fighting for a GND that shifts “from global systems of production and consumption that are energy intensive and fossil fuel dependent to more localized systems that are sustainable, resilient and regenerative.”

Fourth, stocks and other investment instruments in land and resource grabbing ventures that cause social and environmental conflict and harm in faraway places should be prohibited. This may require profound restructuring, dismantling or abolition of the financial and corporate structures that allow for these kinds of investments. At the least, it would entail deep rethinking of the metaphor of corporate personhood

Fifth, the GND should explicitly reject economic growth as a rationale and driving objective. It should oppose perpetual economic growth and promote communities committed to solidarity, maximal sharing and minimal use of materials and energy.

Sixth, the GND should place limits on wealth, which would help minimize or end the remote ownership problem. The most obvious way to do this is through progressive income taxation or a tax on wealth. For this to be effective, there of course also has to be collaboration between communities worldwide against tax evasion, with the aim of abolishing tax havens. A more radical transformation would be to target the globalized currency system which makes it possible for Wall Street investors to buy African farmland with US dollars in the first place. Or, the international community could finally adopt taxes on financial transactions; already implemented in some countries, this could be expanded to more countries and international transactions.

Some tough questions to test these proposals

If the GND is a step toward post-capitalist societies where remote owners, if they still exist, are no longer able to adversely affect far away ecosystems and people, it nonetheless is starting off in a globalized capitalist economy. As John Bellamy Foster has written, “We have to go against the logic of the system while living within it.” Making the proposals above work will not be easy. It will require people power through mass organizing and consciousness building. And it will mean confronting some tough questions. Here are a few. 

Does the GND inevitably imply ongoing wealth and resource extraction in the global South to benefit the global North? If so, what are the implications for remote ownership and place-based governance? If not, what mechanisms are needed to minimize or end wealth and resource extraction in the global South to benefit the global North?

How can the GND address remote ownership in the form of ownership of financial stocks or other financial investments—keeping in mind how many people are counting on this type of investment for their retirement and long-term care?

What are some good examples that could be duplicated or scaled up of place-based governance systems that maintain fairness among humans and between humans and other life across generations? How should duplication and scaling up account for the unique features of different places and avoid one-size-fits-all approaches?

Can the GND adequately address, as Deranger puts it, the “intertwined roles of capitalism, consumerism, militarism and colonialism as foundations to the current crisis” if it remains “driven by White ENGOs, those with the resources and power, and mainstream political parties”?

Is re-establishing traditional labor protections and increasing unionization a long-term solution, or does it risk locking in an us-them worker-owner power dynamic—where the owners are often also remote owners and land and resource grabbers—that other alternatives could overcome?  What about more locally-committed, place-based employee-owned businesses or cooperatives?

Final thought

Questions like these need to be asked in relation to every single aspect of GND proposals in the advanced capitalist countries. Political organizers and activists should think about how to balance such critical questions with the visionary rhetoric that makes the GND so popular—all the while keeping in mind that the strength of a GND vision should be judged on the basis not only of its policy designs but also its ability to inspire and unite broad movement building for climate justice. Grappling with entrenched problems of remote ownership is one way to take a focused approach to building momentum for this movement.

Dr. Geoff Garver is an adjunct professor at Concordia and McGill Universities in Montreal and coordinates research on law and governance at McGill University for the Leadership for the Ecozoic initiative. He is on the steering committee of the Ecological Law and Governance Association and the board of the Quaker Institute for the Future and is active in the international degrowth movement.

Public money for environmental justice

Fearless Girl statue, facing the Wall Street bull. Image: Alex Proimos CC BY-NC

by Joe Ament

The Green New Deal is perhaps the most audacious plan to ever seriously address the grave social and environmental challenges we face. By identifying “systemic injustice,” the plan is sweeping in its scope. Yet, while the plan discusses public banks in a reference to adequate capital, the plan fails to see the commercial banking sector as one of the structural causes of, and impediments to solving, the problems we face. Importantly, the Green New Deal fails to articulate exactly why a nationalized banking system is critical to the success of the programs its proposes.

Money is created in modern economies when commercial banks extend interest-bearing loans to individuals and corporations. The money in those loans does not exist before the loan is generated but is created when the bank marks up the borrower’s checking account. This is in stark contrast to the general notion that money is a finite resource, such as gold, that is allocated to its best economic use by the Central Bank.

When money is created by the private sector in the manner discussed above, it is seen as a private resource. Accordingly, public use of money for government spending is viewed as wasteful expenditure rather than productive investment. In the case of the Green New Deal, the massive price tag is seen as cannibalizing the productive private sector. It is for this reason that opponents of the Green New Deal argue that it will hurt the economy, and its proponents argue to “finance” the plan by moving money from one sector to another, e.g. from Wall Street to Main Street.

Money is a social relation. It is an abstract measure of what we all owe to one another.

Money, however, is not a private resource. And it is not a finite commodity. Money is a social relation. It is an abstract measure of what we all owe to one another. Think of it as a tally of everything you owe and are owed, for all the work you do and all the purchases you make. Now extrapolate that to the whole country, let the government manage it—just like it does with laws and other contracts—and you’ve got a monetary system!

The role of the government is crucial in managing the money system. Since money is a social relation, the government is responsible for the money system. Think of what happened in the Great Depression, the Savings and Loan crisis, and the 2008 Financial Crisis: the government always stepped in to repair the money system. And as guarantor of the social relation, it always will.

Monetary theorists understand the government’s monetary prerogative in three ways. First is the government’s ability to choose the unit of account that is used in the country—dollars in the United States and Canada. Second is the government’s ability to issue those units of account into circulation. Third is the benefit of first use that comes with issuing money. This last right is called seigniorage and can be thought of as the profit of creating money above the cost of printing and distributing that money.

Money has existed as a state-managed tally of owing and being owed (of credits and debts in theoretical parlance) for thousands of years. In fact, a lot of evidence suggests that such monetary systems existed for thousands of years before coins and markets—and might even be the reason humans began to settle in the first place! (See Money: The Unauthorized Biography.) Capitalism is a relatively new manner of social organization and is characterized by a transition from state-created money to bank-created money.

Think about that for a moment. Capitalism is about bank-created money! For thousands of years, the state, for better or worse, controlled three monetary prerogatives discussed above. The state created money by spending it into existence and guaranteed its value by levying taxes in the unit of account in which it spent. Beginning around the twelfth century, however, states began to expand beyond what their power to tax could justify and so they asked private merchants for loans. (See Brown 2013, p.111, and Davies 2002, p.261.) Slowly but surely, states lost the majority of their power to create money and the seigniorage benefit that came with that creation. States only kept the power to determine the unit of account. But with that power came the responsibility to manage the stability of the unit of account.

There has been precious little discussion on ending or reigning in the commercial banking industry’s money-creation power.

It is this strange conflict of interest with which this paper is most concerned. The state is forced to ensure a stable dollar, but it isn’t able to determine how—or for what—dollars enter society. So while much of the discussion surrounding the Green New Deal concerns ending or reigning in capitalism, there has been precious little discussion on ending or reigning in the commercial banking industry’s money-creation power.

While capitalism is often thought of as the private accumulation of surplus, the manner in which that accumulation is enabled is often ignored. Commercially created money means that production surpluses remain within the private sector. Were the state to take back the power to create money, and the seigniorage benefit that comes with such creation, it would severely limit the extent to which the private sector could accumulate surplus. In fact, nationalizing money creation would align the right of the state to create money with the responsibility it bears to manage money’s stability.

Perhaps most importantly, by regaining the monetary prerogative, the state could influence the direction of the economy by spending and lending money into existence in accordance with its goals. In the case of the Green New Deal, these goals would be social justice and environmental sustainability. This would mean that the tenets of the Green New Deal—from healthcare and education to healthy food and sustainable energy—would become structural components of a just and sustainable economy and not simply regulatory mechanisms of an extractive capitalism.

The Green New Deal, as currently written, is an end-of-pipe regulatory framework that relies upon taxing bank-created money to finance social and environmental spending.

This is a huge difference! By avoiding a discussion of a nationalized money supply, the Green New Deal, as currently written, is an end-of-pipe regulatory framework that relies upon taxing bank-created money to finance social and environmental spending. A nationalized money supply would transform government spending into the monetary creation mechanism and embed justice and sustainability as hallmarks of how we manage our national economy.

Joe Ament, PhD, is an ecological economist at The University of Vermont whose research explores monetary theory and policy in the context of socio-ecological equity.