http://www.nytimes.com/2016/12/09/upshot/what-would-it-take-to-replace-the-pay-working-class-americans-have-lost.html?smid=nytcore-ipad-share&smprod=nytcore-ipad
Sunday, December 11, 2016
A Great Idea! Expand the Earned Income Tax Credit by a trillion dollars over the next decade! We could easily pay for it with a carbon tax that would stimulate an economic boom in the clean energy industry and retard climate change to boot. Who says there is no such thing as a free lunch? Economists do, but they (including me) are often wrong.
Tuesday, December 6, 2016
2. Economic Democracy for a Post-Material Future
NOTE I AM REPOSTING THIS BOOK CHAPTER IN RESPONSE TO AN ARTICLE IN THE NEW YORK TIMES ON 12/6//2016 "A BIGGER ECONOMIC PIE, BUT A SMALLER SLICE FOR HALF THE U.S. GO TO http://www.nytimes.com/2016/12/06/business/economy/a-bigger-economic-pie-but-a-smaller-slice-for-half-of-the-us.html?_r=0
Conventional businesses run on top-down authority as opposed to a bottom-up democratic form of decision making, and their fundamental drive is to maximize profits and and shareholder value as opposed to achieving broader social goals such as economic equity or democratic participation. Post-materialist values as a consequence get short shrift. A reasonable solution to both the social desire for democratic participation and economic equity is a relative expansion of employee ownership in the economy as a whole. To be certain of this we need to look in more detail at the feasibility of employee ownership as a form of business organization and how its expansion can occur.
Judging from the positive response to Thomas Picketty's now famous Capital in the Twenty-First Century, many now agree that a defining and damaging feature of the global economy today is an extreme inequality of capital ownership. A means for reducing such inequality mentioned by Picketty is a democratization of wealth ownership that extends more widely the opportunity to become full fledged capitalists. Instead of pursuing this line of reasoning, Picketty instead focuses on a global wealth tax as a more realistic strategy for mitigating economic inequality, but in doing so he just might be selling short capital democratization. Perhaps he avoids this approach on grounds that it is too radical to be of practical importance, but a tried and true method compatible with modern economic arrangements is available—expanding the participation of employees in the ownership and governance of businesses for which they work. If employees become substantial owners of capital, then wealth automatically de-concentrates, bringing down economic inequality.
Employee ownership and control not only matters for the inequality of income received from business profits, but also for the relative distribution within an enterprise of income from wages and salaries. An employee owned and controlled enterprise turns the hiring decision on its head. Instead of management hiring labor, labor now hires management and can directly control income inequality by establishing maximum ratios between the earnings of the highest and lowest paid positions within the business. The modern phenomenon of manager-controlled boards setting top management compensation at extraordinary levels now disappears. Democratically elected, employee controlled boards can set internal maximum income ratios between the highest and lowest pay scale at the minimum necessary to attract managers with the appropriate skills to run the show. In short, managers under employee ownership lose the power to set their own rates of compensation. Evaluations of managerial marginal product, the actual addition they make to the bottom line, would rule the day in setting compensation, not managerial political power. Workers would also be able to influence organization decisions on the normal workweek, overtime, vacations, and the organization of work itself, constrained, of course, by the requirements of competition in the larger economy.
These features post-materialists will find appealing on the job, since they place freedom of expression and having a say at work ahead of economic growth as essential social goals. Millennials, many of whom subscribe to post-material values, more than others desire to have frequent feedback on both their own employment performance and how their work fits into their employer's larger organizational strategy. Millennials also express a greater willingness than others to sacrifice income for meaningful work that has an positive social impact. They want the work they do to matter. A study by The Intelligence Group reports that 64 percent of Millennials would rather earn $40,000 a year at a job they love than $100,000 a year at a job they find unfulfilling. The Intelligence Group’s Jamie Gutfreund studies generational trends and differences, and she finds that “Millennials were raised with a different perspective.” They desire to see how their employers are making the world a better place, and want to contribute to those efforts.
Conventional businesses run on top-down authority as opposed to a bottom-up democratic form of decision making, and their fundamental drive is to maximize profits and and shareholder value as opposed to achieving broader social goals such as economic equity or democratic participation. Post-materialist values as a consequence get short shrift. A reasonable solution to both the social desire for democratic participation and economic equity is a relative expansion of employee ownership in the economy as a whole. To be certain of this we need to look in more detail at the feasibility of employee ownership as a form of business organization and how its expansion can occur.
***
The most famous and studied example of employee ownership is an extensive system of producer cooperatives centered in Mondragon, a town of 22,000 located in the mountainous Basque region of Spain. Founded in 1956 by 25 workers educated together at a local technical school, the first Mondragon cooperative has grown into a federated system, known as the Mondragon Cooperatives Corporation, composed of 289 companies employing some 80,000 throughout Spain in manufacturing, retail, finance, and education. Central to Mondragon’s success is a large, credit cooperative, the Caja Laboral, that today operates throughout Spain in 400 local branches. The Caja, a jointly owned second degree cooperative, greases the financial skids of growth for the system as a whole and fosters the creation of new enterprises through its Empresarial division by seeking out and assisting those desiring to start new cooperatives. A close second in importance for the success of the larger system are a number of educational cooperatives, including the Mondragon University, that pair academic instruction with extensive technical training. Important also are the Mondragon Corporation’s technology research centers that currently hold more than 500 patents and help to keep individual manufacturing cooperatives abreast of the latest innovations in their respective industries. At the economic foundation of the cooperative system is its industrial sector producing an array of home appliances, furniture, sporting goods, motor vehicle components, and capital goods. Second in importance to manufacturing is Mondragon's Eroski retail group which operates 2,400 stores in Spain and southern France including super markets, travel agencies, petrol stations, and perfume and sporting goods stores.
Mondragon differs fundamentally from a conventional corporation in its ownership and governance structure. Employees, not stockholders, own each cooperative and through membership in a general assembly elect its management committee. The committee in turn hires managers and oversees their performance. On becoming a member, each employee purchases a share in the cooperative, usually financing it with a loan paid back through a payroll deduction. Each year, a tenth of a cooperative's profits go to charitable activities in the local community, twenty percent ends up in a rainy day reserve fund, and the rest is distributed to individual employee-owner interest bearing capital accounts that can be withdrawn only on retiring or resigning from the cooperative. These retained funds provide a key source of finance for new capital plant purchases and other investments by the cooperative system as a whole. In short, labor hires and controls capital, turning conventional capitalism on its head, making a big difference in both the work experience and distribution of income and wealth. Each employee has a say in the running of the business through the power of their vote and interactions with management committee representatives, and each shares in the business' surplus earnings through their ownership share.
Economic inequality within each Mondragon cooperative is directly controlled by a ceiling on the ratio of the highest to lowest base pay over all employment positions. In the early days, the ceiling was set no greater than 3 to 1, meaning that pay for the top manager in a cooperative could be no more than three times that for the lowest paid position. In recent years, to attract good managers, the official ratio has risen to 9 to 1 for some cooperatives. This ratio also plays a role in the determination of annual profit distributions to individual capital accounts since relative amounts are based on each member’s total annual wage payment. Capitalist corporations rarely make any attempt to explicitly control internal economic inequality; in cooperatives operating on Mondragon principles, internal inequality is under democratic control, and an increases in inequality occurs only if it benefits the organization as a whole. Thomas Piketty's concern for the tendency of inequality to rise in a capitalist economic system would be greatly dampened were cooperatives to become a substantial portion of the total economy. A bonus for post-materialists in a cooperative economy would be satisfaction of their desire for more say on the job.
If in comparison to capitalist enterprises cooperatives possessed a lower rate of productive efficiency or a lesser capacity to withstand competitive pressures, their participatory virtues would be trumped by threats to their ultimate survival in the global marketplace. The five-decades of survival and growth of Mondragon offers strong evidence for the capacity of a cooperative system to experience long-term economic health and prosperity. Comparative studies find that Mondragon cooperatives exhibit greater productive efficiency than their capitalist counterparts and greater rates of growth in output and employment. Their array of supporting institutions for education, research, entrepreneurial support, and finance appear to give Mondragon cooperatives a special advantage compared to their capitalist competition in both productivity and innovation. Perhaps most important of all in Mondragon’s success is its participatory structure creating a kind of "moral bond" between individual employee members and their organization that drives a constant quest for finding better ways of doing business.
Given its competitive advantages over the conventional businesses, the lack of a more expansive global cooperative economic sector looks puzzling at first glance. The essential barrier to the creation of a cooperative economy turns out to be the rare conditions required for its initial formation. Once a cooperative system is established it can be self-perpetuating as the Mondragon experience suggests. Individual new cooperatives can be established within a larger system by way of internal schemes of support for entrepreneurs with ideas and plans for new ventures. The problem comes in establishing the cooperative system itself. Mondragon's founding cooperative guru was Don Jose Maria Arizmendi, a local parish priest. Using his knowledge of economics, cooperative history, and Catholic social teaching, Don Jose sought to bring back prosperity to the local Basque economy, gravely damaged in the Spanish Civil War, by establishing a technical school for training the young in industrial skills and the principles of cooperation. Graduates soon founded the first cooperative for the production of cook stoves, and Don Jose spearheaded the formation of a credit cooperative to help fund local development. Today we would call Father Arizmendi and his students "social entrepreneurs," individuals who establish business organizations for both the achievement of a social purpose and the earning of an income. The social purpose of Mondragon is to advance economic prosperity for everyone in the Basque region of Spain as well as to promote the principles of social and economic cooperation. In the context of a profit driven global capitalist system, social entrepreneurship looks like a fairly rare phenomenon, but we will see later that such may not be the case looking into the future.
Sticking with "idealistic social values" for a huge organization such as Mondragon in an intensively competitive global economy can be a serious challenge. A Mondragon enterprise, as any cooperative, faces the danger of "degeneration" through the replacement of older members who retire with less costly nonmembers who don't share in governance or profits. This strategy in its rawest sense amounts to exploitation of nonmember employees by a cooperative's members. By hiring outsiders, each member will gain a larger piece of the profit pie in a shrinking pool of full cooperative participants. To prevent such degeneration within Mondragon, in the 1990s all industrial cooperatives located within Spain established a target of at least 85 percent member employment, and currently 89 percent of industrial cooperative employees are also full fledged members.
Outside the Spanish industrial cooperatives, Mondragon still faces hurdles in achieving its membership goals and preventing its transformation to a conventional form of businesses organization. The largest numbers of nonmember Mondragon employees are found in the Eroski retail group and in Mondragon-owned Chinese subsidiaries. Facing competitive challenges from other retail chains, Eroski undertook a strategy of rapid expansion in Spain and France outside the Basque region beginning in the 1980s through both new store construction and acquisitions. Expanding the cooperative form of ownership to 30,000 new employees would have been too cumbersome to accomplish quickly, and the more flexible conventional labor contact was adopted instead to facilitate rapid growth. In the meantime, a voluntary partial ownership program has been established and extended to some 5,000 additional employees on top of the 9,000 that are already full employee-owners, and a plan is now in place to bring all 50,000 Eroski employees under the full cooperative ownership umbrella.
Mondragon, like conventional businesses around the world, had little choice but to meet the challenges economic globalization, and it did so by creating overseas subsidiaries to gain access to foreign markets and to meet the challenge of competitors moving plants to countries with low labor costs. Mondragon currently employes about 12,000 non-owning workers in its Chinese subsidiaries serving both domestic and export markets. The ultimate goal of overseas expansion is less to expand cooperative ownership abroad than it is to sustain employment in cooperatives at home in complementary activities. Whether Mondragon can extend its cooperative model overseas remains an open question. The Chinese, despite their collective economic experiences of the past, lack familiarity with the ideas of employee ownership, profit sharing, and democratic participation in management. Nonetheless, Mondragon plans to begin introducing such ideas to its Chinese employees and experimenting with partial ownership plans. Whether these efforts can succeed remains an open question.
Creating a cooperative economy subscribing to those principles followed by Mondragon remains a substantial challenge, but doing so would better serve post-materialist values than the capitalist alternative, as we have already argued. The essential dynamic for creating a capitalist enterprise is the ability for a founding entrepreneur to lay claim to present and future profits generated by the business. This is the reward for gambling one's savings, time, and energy on a new business venture. In creating a cooperative enterprise, the founders will own an equal share of the business along with all other employee-members, and perhaps win access to somewhat higher paid managerial positions, but even that is not assured given the democratic process underlying the selection of managers. Social motives will need to stand beside economic drives for the establishment of cooperatives. Once a cooperative system on the order of Mondragon comes into being, the risk of founding new enterprises can be substantially reduced through a support system offering venture finance, technical assistance, and trained employees, but strong social motive will still be required for the founding of the system itself. Without Father Don Jose Maria Arizmendi’s selfless efforts in the initial founding of Mondragon, it would likely not exist today. Creating employee-owned enterprises in the first place is the essential challenge, but it just may be overcome by the emergence of post-materialist values driving a global expansion in social entrepreneurship as we will now argue.
***
Making as much profit as possible defines the essential drive of a capitalist and materialist economy. Only those economic innovations that bring significant profits will be of interest to materialistic capitalists. In a post-materialist world, the motivation for innovation broadens. Profitability continues to be important, but innovation takes on a social dimension as well. Post-materialist innovators possess a broader array of social goals in the work that they do than profit alone. We get a hint of this in the Sergey Brin and Larry Page experience of founding Google. They went into business because they wanted to create the best possible internet search engine. Of course they made an incredible amount of money along the way making the attainment of their social ends a whole lot easier and more pleasant.
The idea of social innovation has gained a special currency among academic researchers in recent years who have begun to take a serious look at the driving forces behind what has come to be known as “social entrepreneurship.” The notion of “entrepreneurship” has been around for a very long time and refers to the act of creating and running a new business that delivers a good or a service for the purpose of making a profit. “Social entrepreneurship” refers instead to the act of creating and running a new organization with a goal of accomplishing a social purpose as well as making a profit. Both the founders of Google and Facebook have publicly expressed social goals for their organizations alongside achieving a threshold of profitability.
Survey researchers work to identify concretely the phenomenon of social entrepreneurship with a question that takes the following form: “Are you, alone or with others, currently trying to start or currently owning and managing any kind of activity, organization or initiative that has a particularly social, environmental or community objective?” A second question ascertains whether a survey respondent is involved in starting a for profit enterprise: “Are you, alone or with others, currently trying to start a new business or owning and managing a company, including any self-employment or selling any goods or services to others?” Respondents answering the first question positively are “social entrepreneurs” while respondents answering the second question positively are “commercial entrepreneurs.” In cases where the same respondent reports a positive response to both questions, a third question is asked to determine if the businesses referred to in the two responses are one in the same, and if so the overlapped enterprise counts as a social business. Across an adult population survey sample of from 49 countries at different stages of economic development, the incidence of early stage social entrepreneurialism (an organization that is 3.5 years old or less) ranges from a high of 4.1 percent in the United Arab Emirates to a low of .1 percent in Guatemala. The rate for the U.S. is comparatively high at 3.9 percent. The global average is 1.8 percent with low income countries averaging 1.3 percent, middle income 1.8 percent, and high income countries 1.9 percent. The incidence of total early state entrepreneurialism by country, including both social and pure commercial, averages 10.7 percent with the respective figures for low, middle, and high income countries equalling 16.9, 11.3, and 6.6.
Given what we know about post-materialist and materialist human motivations, we would expect post-materialists to be attracted with greater frequency than materialists to socially oriented entrepreneurship. Cross-country survey research on commercial entrepreneurialism finds that it correlates negatively with post-materialism, inferring that a reduced desire for economic achievement dampens profit-oriented business formation. This research also finds that the ratio of social to total entrepreneurialism across countries is positively correlated with a country’s incidence of post-material values. Where post-materialism is relatively strong, so is social entrepreneurship. A country’s per capita income positively correlates as well with the ratio of social to total entrepreneurialism. Wealth, post-materialism, and social entrepreneurship all move together.
Poor countries, lacking a robust corporate sector, possess, out of material necessity, a large sector of small, new businesses, many of which are found in the “underground” economy. Everywhere in Cairo, Egypt someone is trying to sell something. For many of the city’s residents, small enterprises provide the only path to earning a living, and not very many of these can afford to pursue a social mission. Nonetheless, social enterprises exist in Egypt and other low income countries. Remember, the incidence of early stage social entrepreneurs in poor countries average a non-trivial 1.3 percent in comparison to the 1.8 global average. Social entrepreneurship indeed occurs in low income countries, and its incidence rises as development takes place along with growth in post-materialism.
One would think that Egypt, with its history of political oppression and military and oligarchical domination of key business sectors, would be the last place for substantial social entrepreneurialism. Nonetheless, we can find in this country fascinating examples of businesses working hard to solve social and environmental problems. Along the way we can also discover a compatibility between a liberal post-materialism and a traditional Islamic philosophical orientation. Modern liberal Islamic scholars argue that one can accept such post-materialist values as environmentalism and still be a Muslim. Belief in the Koran, with its poetic descriptions of worldly being as God’s creation, much like modern Christianity can be reconciled with a modern commitment to personal freedom, economic justice, self-expression, and saving the environment. The theological justification for this view we leave to others and focus instead on its real world manifestation. If social entrepreneurship can flourish alongside Islam and under the political radar in Egypt, then there must be something to it.
***
Ibrahim Abouleish grew up in a mixed Arabic and Jewish Cairo neighborhood in the 1940s and 1950s, went to a Christian school, and became deeply attached to his Muslim faith at an early age. He attended university in Austria where he obtained a medical degree as well as training in research chemistry. After completing his studies, he carved out a successful career in pharmacological research in Austria, married an Austrian, and started a family. Dr. Abouleish has enjoyed and admired European culture throughout his life but remains a committed Muslim to this day, and, unlike many other Egyptians, expressed opposition to war with Israel in the 1960s.
Although he returned to Egypt frequently to visit his family, Dr. Abouleish did not travel extensively in the country until 1975 when he took an eye-opening trip with an Austrian friend. He was shocked by the catastrophic degradation of agriculture in the Nile Valley and the physical decline of Cairo and its living conditions. Construction of the Aswan High Dam in his eyes was an unmitigated disaster by halting the age-old annual flooding of the Nile that covered fields with life-giving fertile mud. Farmers were forced to compensate for this loss of fertility by applying large amounts of fertilizer which in turn led to excessive salting and soil compression.
On his return to Austria, Dr. Abouleish investigated and pondered what had happened to Egypt and began to seek alternatives to the continued degradation of the rural landscape. He became especially interested in biodynamic agriculture, a type of organic farming developed by students of philosopher Rudolph Steiner and his scheme of thought, anthroposophy. This form of farming had been successfully used for decades in Europe, especially in Italy. After traveling and learning about biodynamic methods, Dr. Abouleish set aside his research career and, with his wife and children, moved back to Egypt in 1977 to establish an organic farm. The farm became the starting point for the Sekem initiative, whose name is taken from ancient Egyptian hieroglyphics for the life-giving vitality of the sun.
Sekem, headquartered at the original farm site north of Cairo, today includes five different companies that employ 1,800 people and produce and sell a variety of organic products including natural medicines, cereals, rice, vegetables, pasta, honey, jams, dates, spices, herbs, edible oils, herbal teas, juices, coffee, milk, eggs, beef, sheep, chicken, seeds, and organic cotton textiles and clothing. One company, ISIS, distributes more than 80 percent of the herbal teas sold in Egypt. Sekem currently operates five farms on reclaimed desert lands that provide almost a third of the company’s organic raw materials and has created permanent “Fair Trade” ties with small farmers for the rest. Sekem’s secret weapon in desert reclamation is compost, a product it both uses itself and sells to other farmers. Compost rich soil in deserts increases fertility and productivity, retains much more water than conventional farm soil (essential in an arid climate), and sequesters substantial amount of carbon in its accumulated organic matter.
While Sekem is a profitable venture, its goals and activities extend well beyond those of a conventional business. Sekem has successfully advanced its founding vision of creating ecologically sustainable oases in the desert where health-giving organic goods can be grown in a manner that helps to protect both the local and global environment. In and around these oases, Sekem seeks to create communities where individuals can not only improve their material condition, but expand their educational and culture capabilities as well. In all its efforts, Sekem adheres to strict standards for the protection of human rights (including religious freedom), achievement of gender equity, and educational and cultural advancement as well as rigorous targets for environmental sustainability including carbon emissions reduction.
Through its Development Foundation, Sekem established a school located on its headquarters farm serving 300 kindergarten, primary, and secondary students. The students come from a diversity of social backgrounds, including both Muslims and Christians, and the school emphasizes respect for all religions and contains both a mosque and chapel. In addition to following the Egyptian state curriculum, the school makes a special effort to provide courses in crafts, drama, dance, and music. Sekem has its own orchestra that performs in the local community and gives special support to the practice of Eurythmy, a dance form originating in Europe. The Foundation has also established a modern medical center nearby that serves 120 patients or more a day from employee families and the local community. The clinic offers a variety of outreach programs that address such issues as women’s health, family planning, and sanitation. In addition to these efforts, the Foundation also offers vocational training and education in organic methods. The Sekem Academy located near Cairo undertakes applied research in agriculture and pharmaceuticals and helped to create the Heliopolis University which just recently opened and is offering degrees in pharmacy, engineering, and business. All students will take a set of core courses using a holistic approach to education focusing on culture, the environment, globalism, and the full development of personal abilities. In sum, Sekem in its short lifetime has created an impressive set of institutions with a visionary hope for realizing sustainable social and economic progress in the Egyptian countryside. How such a social invention occurred is a fascinating tale worth the telling.
Starting up something so unusual as an organic farm in an autocratic country dominated by the military and run by centralized bureaucracies proved to be a demanding and frustrating task. One day bulldozers and soldiers arrived on the Sekem farm and started pulling down three-year old trees to clear the land. A local general had decided to turn the farm into a military area to take advantage of a water supply from wells dug for crops, and the intrusion was brought to a halt only because Dr. Abouleish was friends with President Sadat and could ask for his help.
One of the biggest challenges to Sekem arose from pesticide spraying on neighboring cotton fields spilling over onto the farm’s medicinal herbs and other organic crops, threatening the company’s certification as a biodynamic producer. Fearing a collapse in the cotton crop, the Egyptian government refused to curtail pesticide spraying. Sekem set out to prove on test plots that organic methods to control pests can be just as functional and no more costly than conventional pesticide applications. After several years of testing, Sekem demonstrated the effectiveness of organic methods, and pesticide use was eventually halted on all of Egyptian cotton fields. As a reward for its efforts, Sekem successfully entered the organic cotton business.
Egyptian pesticide companies of course were unhappy about the loss of a lucrative market caused by Sekem and began a campaign to generate negative publicity against the company. Newspaper articles soon appeared suggesting that organic agriculture is unaffordable for poor countries like Egypt and that Sekem is a pawn of wealthy Europeans. The most damaging attack came with a widely circulated news report that the company’s employees engaged in sun worship on the job, a practice seen as idolatrous and horrific to faithful Muslims. The news article grossly misrepresented a weekly employee assembly where all stand in a circle to emphasize the importance of each individual in the work of the whole and the equal dignity of everyone.
To combat attacks by prayer leaders in local mosques, Dr. Abouleish decided to invite all local Muslim community leaders, mayors, and sheiks to Sekem to show how the company’s mission promotes important virtues of the Muslim faith. He used passages from the Koran to illustrate how organic agriculture meets the call for faithful Muslims to be “...responsible for the earth, plants and animals.” To make his point, Dr. Abouleish quoted the following from the Koran along with other similar passages:
The sun and the moon pursue their ordered course. The plants and the trees bow down in adoration. He [God] raised the heaven on high and set the balance of all things, that you might not transgress it. Do not disrupt the equilibrium and keep the right measure and do not lose it.
He continued in the meeting to explain exactly how biodynamic agricultural methods support the balance of nature more effectively than the kind of farming that makes heavy use of pesticides and fertilizers. The audience was impressed by the connection between organic agriculture and the call of the Koran for human stewardship of the Earth and nature. Positive articles about Sekem soon appeared in the Egyptian media and public doubts about the company evaporated.
This brief summary of Sekem’s overcoming of early tribulations offers only a partial and incomplete picture of its accomplishments. For the complete story, I urge readers to take a look at Dr. Abouleish’s book, Sekem: A Sustainable Community in the Egyptian Desert.
The Sekem experience demonstrates a potential in Egyptian agricultural for expansion and employment growth while at the same time doing good turns for both rural communities and the environment. One of the biggest advantages Egypt and other north African countries possess for organic food production is their proximity to European markets. Demand in Europe for organics has been growing rapidly in recent years, and the ability of Egypt to provide crops in all seasons is a special competitive benefit. Because of its reduced demand for water relative to conventional crops, organics place less pressure on scarce water resources, and since organics don't require pesticides or synthetic fertilizers, a transition to organic cropping in and adjacent to the Nile Valley would substantially diminish the region’s water pollution problems. The buildup and retention of carbon in organically cropped soils and the reduced dependence on fossil fuel based pesticides and fertilizers that comes from a transition to organics has the positive side-benefit of diminishing the impact of agriculture on climate change. Since organic methods are often more labor intensive than mechanized conventional agriculture, a shift in cropping to organics would in itself increase employment. Perhaps the biggest benefit of Sekem’s approach is its practice of creating farms on desert lands through the addition of compost to the soil and the development of highly efficient irrigation systems using deep wells. In this way, Egyptian agricultural production is expanded without placing added pressure on scarce Nile Valley land and water resources. Sekem can’t be accused of ignoring the Egyptian need for good food since almost 70 percent of its total sales occur in the domestic market. The lucrative export market essentially provides added financial power to Sekem for investing in domestic agriculture to the benefit of Egypt as a whole. The point is simple: expansion of organic agriculture in Egypt and elsewhere can be good for both economic development and the environment, and in this endeavor Sekem offers an enticing model for solving a multitude of economic, social, and environmental problems in rural areas of the Middle East.
Ibrahim Abouleish is just one man who has successfully sought an intersection between the Muslim faith and European post-materialist values. In his life, he orients himself both to the tenants of Islam, and to self-expression, individual freedom, tolerance for human differences, and environmental protection. Islamic scholars have little trouble constructing an environmental ethics rooted in the Koran, but whether such ethics will matter much in the future remains an open question. The Sekem experience points at least to the potential for a sea change in Islamic environmental practice with Muslim social entrepreneurs, such as Ibrahim Abolish, leading the charge to a better environmental and economic future.
***
To backyard gardeners who love to muck around in real dirt, growing plants in water somehow seems other-worldly, but the science of doing so, known as hydroponics, is a well established technology. Soil in natural conditions serves as a reservoir for water and plant nutrients, but plants don’t actually require soil to survive. Nutrients are absorbed by plants through roots as inorganic mineral ions dissolved in water. So long as plant roots have access to water containing essential minerals, plants can survive without soil. Since plant survival also requires access to oxygen through roots, roots cannot be completely and perpetually immersed in water unless it is adequately aerated or else the plants will drown. Plants can be grown hydroponically in solution using something as simple as a water in a Mason jar, but more frequently growers use an inert medium in which to grow plants such as perlite, gravel, mineral wool, or coconut husk.
Hydroponic gardening has virtues that offer special advantages for growing plants in an arid climate like Egypt’s. In soil-based farming, applying the right amount of water is a tricky business. Too much watering causes plants to die from a lack of oxygen, and too little leads to plant starvation. For hydroponic farming, plant roots can be continuously or frequently exposed to nutrient-laden water and the plants can absorb as much or as little as they want. Unused water can be drained away and recycled keeping water use to a bare minimum. The key challenge for the hydroponic approach is to get the balance of needed mineral in the water just right, including macronutrients such as nitrates, calcium, phosphate, and magnesium, and micronutrients such as iron, copper, zinc, boron, chlorine and nickel. In addition to an appropriate balance of nutrients, care must be taken to not let the water’s pH get out of whack or salts to build up excessively. Any interruption in water flows can be catastrophic, and water must be stored in light-free tanks to prevent the formation of algae. A successful hydroponic system can achieve high levels of productivity with a modest water and nutrient input.
The other central ingredient in plant growth is sunshine, something that Egyptian rooftops have in abundance year around. The country’s low income residents have long used rooftops to raise chickens and goats but not to grow crops. Looking out over Cairo's rooftops from a minaret or any other high vantage points, one sees mostly accumulated debris, satellite dishes, and virtually nothing green. The dream of social entrepreneur, Sherif Hosny, is to green up the city's rooftops by creating on them hundreds of hydroponic gardens in the city’s poorest neighborhoods. Hosny appropriately named the business, Schaduf, after a simple tractional Egyptian farm tool from raising water to higher ground for crop irrigation, and why not to rooftops?
Schaduf offers Cairo’s low income residents a simple but functional and efficient form of hydroponic farming. Construct on a family's rooftop three 20 square meter ponds made of brick sides about 10 centimeters high and place a waterproof liner on the inner surface, fill with water and cover with sheets of floating styrofoam to serve as a platform for plants, and install a circulating pump for oxygenating the water. Add a standard hydroponic nutrient mix and plant the seedlings. Come by and check the pH and electrolyte levels weekly, replenish nutrients as needed, and soon with the help of Egypt's sun and heat you will have a rooftop of green produce that can be sold for 300-500 Egyptian pounds a month, significantly increasing a Cairene's family income and creating a wonderful place for children to play that pulls them away from the dangers of the streets. Sherif's company, Schaduf Urban Micro Farms, will provide a poor family with a rooftop farm costing about 4,000 Egyptian pounds that can be financed with a micro-loan easily paid off in a year. Schaduf then helps maintain each farms, periodically checking the nutrient mix and controlling any pests organically, and also collects and sells the produce in a local Zamalek farmer's market for its clients.
While visiting Cairo, my wife and I, along with our son and his boss, ate a celebratory dinner costing 1,000 Egyptian pounds at a fancy restaurant on the Nile called the Sequoia, a place where Cairenes go to be seen. This means roughly that a low-income rooftop garden costs about four Sequoia meal equivalents, an amount of money that doesn’t mean much to us affluent westerners, but can make a huge difference to the lives of Cairo’s urban farmers.
Leaving a successful career as the Middle East Regional Managing Director for mining Giant Rio Tinto Alcan, Sherif Hosny moved on to become a creator of rooftop gardens. Ask him why he gave up a lucrative career to take up urban farming, he will tell you that he wants to help others, likes working with plants, and desires to earn enough income to live on. In these motivations, Hosny differs little from Ibrahim Abouleish, the founder of Sekem. While he grew up in a Muslim family, Hosni doesn’t claim that his faith played any special role in his decision to found Schaduf, yet what he is doing satisfies Islamic premises much like Sekem does.
Hosny chose to do a business rather a nongovernmental organization (NGO) so he wouldn't have to worry about raising money for operations, and he wanted the people he helps to have a vested interest themselves in sustaining the final product, the rooftop farm. If nothing else, Schaduf’s clients will work hard to pay back the micro-loans they take out for their farms, and once they do, their take-home income jumps, encouraging them to keep their efforts up. NGOs are a part of the picture for rooftop farming and make a difference for Schaduf by helping to identify eligible clients and arranging micro-loans. The beauty of the whole venture is that it is self-funding and can be readily scaled up as the business grows.
Hosny continues to work on new ideas for rooftop farming, including an organic nutrient mix to replace the standard chemical variety. Schaduf's most important innovation to date has been the development of the simple brick-sided floor pond to replace the usual wooden racks hydroponic gardeners typically use to support plant trays, which turn out to be uneconomical in Cairo because wood is too expensive. In the past Hosny experimented with an aquaponic approach to micro farming using tilapia, but the fish couldn't survive Cairo's winter temperatures in the shallow tanks required by a rooftop location, and heaters proved to costly for his low-income clients. Schaduf also sells rooftop hydroponic gardens to more affluent customers who want to grow their own plants and create a green space for their family. Doing so augments Schaduf's sales and income and increases the scale and efficiency of its operation, allowing the venture to better serve its low-income farmers.
Sherif Hosny fits the classic definition of a social entrepreneur, someone engaged in business to solve social or environmental problems, not just to earn profit. Hosny and Schaduf help poor families increase their income, expand the supply of healthy greens for Cairenes, and create much needed green space in a city that has very little. In this effort, Schaduf engages in social invention—the search for new and innovative methods for solving social and environmental problems. Schaduf not only applies a time-tested technology in a new way, but creates a new form of pesticide-free agriculture that functions without substantial fossil fuel inputs and requires very little water, a huge benefit in a desert environment. Schaduf, like any other entrepreneurial venture may or may not work out, and if it doesn't Hosny will move onto something else. Given the important functions Schaduf fulfills, I suspect that it will succeed and contribute to a better future for Egyptians.
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Ahmed Zahran grew up in Cairo, received a bachelor’s degree from the city's American University, and a masters from the University of London. While he never was exposed to renewable energy in his studies, he gained an interest in it early on, and wanted to make a career of it. Because of a lack of opportunities in Egypt, Zahran went work for Shell Oil Company and eventually landed in the company’s carbon emissions trading department. Here it soon became clear to him that the only way to reduce emissions was to shift from fossil fuels to solar, and his work at Shell was not going to help much in achieving that goal.
Zahran returned to Egypt and went to work for a solar energy company that unfortunately succumbed to the upheaval of the Arab Spring. This experience led Zahran to join with some friends in founding KarmSolar for the purpose of developing solar energy applications to serve the challenges of rural Egyptians who live in desert landscapes. KarmSolar quickly gained global attention for its work on high capacity off-grid solar water pumps that recover underground water from very deep wells for agricultural uses. The premise of KarmSolar is to offer Egyptians the opportunity to live in off-grid desert communities and have access to unexploited groundwater resources available on the edges of the Nile Valley and desert oases. The idea is to pull population away from an overcrowded Nile and take advantage of the desert’s abundance of sun and soil much like Sekem has done.
The standard approach for Nile Valley irrigation agriculture is to mindlessly flood the fields periodically to supply water to plants. On reclaimed desert lands, groundwater is too scarce and flooding too wasteful. Movable sprinklers and drip irrigation systems offer a much more water efficient approach to growing crops. Sprinkler irrigation turns out not to be very effective for anything but low value fodder crops because of leaf salt-burn on broadleaf plants or problems with fungi forming because of water accumulation on leaf surfaces. Drip irrigation systems, with perforated plastic piping laid out in rows adjacent to vegetable or fruit plants, offer a highly efficient method of water and liquid fertilizer delivery to plant roots. In this sense, drip irrigation and hydroponic agriculture bear a similarity. Some drip irrigation farmers take advantage of a lucrative nearby European organic fruit and vegetable market by creating liquid organic fertilizer from animal manure onsite for delivery to plants through the irrigation system. One might think that a huge upfront investment requirement rules out all but big farms for drip irrigation, but already in desert landscapes hired workers learn the drip irrigation ropes and install inexpensive drip systems on their own nearby small plots.
The big problem currently for agriculture on reclaimed Egyptian desert far away from an electrical grid is dependence on diesel powered generators that require difficult to deliver and expensive liquid fuels for their operation. The big advantage offered by the KarmSolar approach is an independent local source of electrical power that can run irrigation pumps and other kinds of equipment such as water purifiers and desalinators. The marriage of solar power and water efficient-irrigation makes feasible the creation of new communities in the desert wherever groundwater can be found. Not only does this opportunity allow KarmSolar to make money to sustain itself, but also opens up a chance for Egyptians to find a new ways of making a living without having to depend on an unreliable electrical grid or an incompetent central government. This is to the liking of social entrepreneurs such as KarmSolar’s Ahmed Zahran and Schaduf’s Sherif Hosny who both express exasperation with government incompetence. It’s fascinating to see entrepreneurial efforts with both a social and an environmental mission, such as Sekem, Schaduf, and KarmSolar, gaining a foothold under the radar of government ineffectiveness and political upheaval, and in the context of a strongly traditional Muslim culture.
***
If it can stand the kind of political stresses experienced in Egypt, then social entrepreneurship should be able to flourish elsewhere in more settled and affluent environments. While our Egyptian entrepreneurs don't directly focus on creating economic democracy in the form of large scale worker-owned businesses, they have advanced economic independence for the people they serve, an important prerequisite for economic equity and personal autonomy. Let’s now top off our discussion of economic democracy with an American case of two socially minded entrepreneurs who explicitly set out to create an environmentally responsible, employee-owned business, New Belgian Brewing Company headquartered in Fort Collins, Colorado.
The brewing industry in the past 25 years has gone no where in terms of its total sales volume, but it's the details that reveal a qualitative revolution within. For years, brewing has been dominated by a few huge industrial producers such Anheuser-Busch, Coors, and Miller, cranking out beers that all pretty much taste the same. To sample a variety of interesting beer in this era, an American had to take a vacation to Belgium or Germany. Since the 1980s, an innovative bunch of craft brewers have invaded the industry, bringing with them beers that actually taste like something. From 2007 to 2012, total U.S. beer production shrank from 214 million to about 210 million barrels while craft brewing increased from about 9 million barrels to 14 million. The American public clearly wants more diverse and better tasting beer offerings, and the craft beer industry is fulfilling their desires. By 2020, craft beer is projected to take over 20 percent of the total beer market. Today, New Belgium Brewing, one of the leaders of the craft brewing revolution, is closing in on 800,000 barrels in annual production, putting it in the number three slot for sales in craft brewing, and will soon open a new brewery in Asheville, North Carolina that will help solidify its front row seat in the industry.
New Belgium's founders got started in the brewing business after an iconic mountain biking trip to Europe in 1986 by Jeff Lebesch, an electrical engineer, where he gained an affinity for Belgian-style ales. On his return to Colorado, Jeff set about learning the art of Belgian-inspired brewing in his home. His ales soon became popular with friends, and he and his wife, Kim Jordan, started brewing commercially for the local market in 1991. Kim had a special talent for marketing and distribution, and sales grew rapidly led by Fat Tire Amber Ale named for Jeff's European biking adventure. A fat tire mountain bike became the defining symbol for the new brewery, and today each employee who stays at least a year gets a "Fat Tire" cruiser town bike for getting around Fort Collins. In 1995 after outgrowing operations in a former railroad depot, New Belgian moved into a new, environmentally friendly state of the art brewing facility. This new brewery concretely manifested the company's mission statement, "to operate a profitable company which is socially, ethically, and environmentally responsible, that produces high quality beer true to the Belgian styles." By this time, the founders had begun transferring shares in the company to its workers through an Employee Stock Ownership Program (ESOP). In 1998, an environmental audit revealed that the company's single largest source of CO2 emissions came, not from fermentation as many thought, but from electricity consumption. The company founders proposed to shift completely to wind power in order to reduce carbon emissions, and put the proposal up to a vote by employee-owners who approved it despite increased costs and reductions in profits that would follow.
The simplest, most financially advantageous path to employee ownership in this country is through the establishment of an ESOP. For founders of businesses like New Belgium who want their workers to gain an ownership stake, an ESOP greases the skids to such a goal by offering significant tax benefits. Businesses can make tax deductible annual contributions to an ESOP trust for the purchase of stock shares from founders to be held on behalf of employees until they retire or leave the company. Alternatively, an ESOP trust can borrow funds to buy shares for participants with the business making tax deductible annual contributions to pay back the loan not to exceed 25 percent of plan participant annual total payroll. New Belgium recently announced that its ESOP trust now owns 100 percent of the shares, meaning that the company is fully worker-owned. By way of an ESOP, founders can at the same time retain a management role in the company, cash out their ownership share, and provide a retirement benefit to employees. An ESOP creates an opportunity for economic democracy, such as employees voting on whether to use only carbon-free energy despite its greater cost, but it doesn't require it. The only absolute requirement is that worker-owners have a say in whether their company is sold to a third party. An ESOP can in theory be structured in its bylaws along the lines of a Mondragon cooperative so that employees choose members of a company's governing board.
The point of the New Belgian case is to substantiate that employee ownership and the greater economic equity that goes with it is feasible in this country. In the U.S. today some 7,000 ESOPs cover nearly 14,000,000 workers. For the continued expansion of this kind of economic democracy, and a turn to more participatory forms akin to Mondragon, the need is for more socially minded entrepreneurs who want to make money but also have a vision to do some good for society along the way. Globally, post-materialists favor “having more say” and “doing something worthwhile” in their working lives over the pure "make as much money as you can" approach to business. For this reason alone, more economic democracy may be on the horizon, a hopeful prospect for pragmatic liberals who want to see more democracy, greater equity, and more business concern with the social problems of the day.
Friday, December 2, 2016
1. MILLENNIALS AND ENVIRONMENTAL HOPE
The 1950s teenage male dream when I was growing up in Seattle, Washington was obtaining a drivers license and buying a car at age 16. And it wasn't just any car, but one that was souped-up, lowered, loud, and possessed of metallic paint and pin striping. For this I saved checks as a grocery store bag boy for two years. This dream today would seem quaint and definitely unfashionable. I suspect most teenage boys now would rather have a top-of-the line iPhone or gaming devise instead of a driver's license or car. In my day socializing took place in and around motor vehicles, and involved cruising around, racing, and hanging out in fast food parking lots. The leisure experience was highly entropic, burning up huge volumes of dirt-cheap gasoline. In Seattle, we couldn't wait for the newly constructed freeway system to open up so we could drive at 60 mph or better from one end of the city to the other. Now, I suspect, a high-speed Internet connection is way more important for teenagers than driving around on freeways or anywhere else.
This impression finds support in statistics on drivers' licenses and driving for young people. The average annual miles driven by Americans in this country peaked in 2004 at a little more than 10,000, and dropped 6% by 2011. The American love affair with the automobile appears to be on the wane, and post-materialist Millennials are leading the way to alternative passions. Between 2001 and 2009, the average yearly miles travelled by car for young people (age 16-34) decrease from 10,300 to 7,900, a drop of 23%. Over this same period, the number of 20-34 year olds without drivers' licenses increased from 10 to 15 percent. A downward trend in driving could well be a consequence of dire economic conditions created by the Great Recession of 2007-2009, but the reduction began before the recession hit, and so far driving has failed to pick up in the recovery.
Reductions in driving by young people may well originate instead in fundamental shifts in attitudes. After World War II, Americans bought into the dream of owning a single-family home in the spatially expansive and auto-dependent suburbs. People wanted to drive and were perfectly happy with the necessity of a motor vehicle for getting from point A to B. For Millennials, the bloom is off the auto-oriented suburban rose, and they now look more often to densely packed, transit-oriented central cities as places to live. Recent surveys tell us that young people more than other age groups claim to have made conscious efforts to reduce their driving. The youngest and oldest age groups more than others prefer to live in so-called "smart growth" neighborhoods with a mix of single and multiple family dwellings and access to public transit, stores, restaurants, libraries, and schools within walking distance. The young especially prize nearby rail links and bus routes. The college-educated young and older empty nesters have fostered much of the four decades old boom in downtown living in many central cities previously suffering rampant population losses. To put it simply, densely packed older cities today offer access to activities and experiences less readily available in the suburbs, and in those cities getting around by walking, biking, or taking public transit is often easier than driving. One can move about readily in the city without driving much, but to live in the suburbs without a car would be a serious challenge.
In my youth social interaction required a car. To see friends one drove. The car was the admission ticket to the teenage club and an essential symbol of one's standing in the social pecking order. Today social life is increasingly an online affair. Communication is virtual and immediate and doesn't require physical travel. Through texting, Facebook, Twitter, and online gaming, young people much more than others socialize virtually rather than driving to meet their friends. When they do get together, they are more inclined than their elders to walk, bike, or take public transit, all eased by living at high densities in walkable cities with bike sharing programs and decent bus and rail systems. Getting around cities is also facilitated by smartphone apps that tells you when the next bus is coming or where the nearest bike-sharing site can be found, or helps you get a ride with Lyft or Uber. When you absolutely need a car, you can rent one quickly through Zip Car or Cars to Go; ownership isn't required.
Substituting virtual sociality for driving isn't an entropic free lunch. Huge energy-sucking data centers keep the Internet running and make possible all the stuff we like to do on our devices. Keeping an iPhone charged for the average user over the course of a year requires about 24 kilowatt hours (kWh) of energy, a little less than the 33 kWh used up burning a gallon of gasoline. But when you add the average annual energy use for the Internet, the per-iPhone user energy requirement rises to about 388 kWh, a little more than a kWh per day. Driving 10,000 miles a year at 25 miles per gallon, however, requires a whopping 13,200 kWh. Entropically speaking, your iPhone and your car are not in the same ballpark. Substituting the Internet for driving indeed reduces energy consumption.
Not all sociality occurs online for Millennials. When they get together, they want doing so eased by close proximity. Instead of living in spread-out, auto-dependent suburbs so loved by their elders, Millennials prefer more densely packed urban centers with abundant places to meet, such as cafes and espresso shops, and the convenience of getting to them by biking or walking. The suburban dream has lost its cache for Millennials who see their aspirations best satisfied in downtown living. This could change, however, if central city education reform is slow in coming and Millennials opt for the suburbs to assure access to good schools for their kids just as their parents did.
Youthful creative types, along with the return of aging suburban expats, fuel much of the boom in condominium construction and conversion of distinctive older commercial buildings to residences in downtowns around the country. Both groups are attracted to the excitement of urban street life in neighborhoods with concentrations of trendy restaurants, theaters, art galleries, espresso shops, brew pubs, bookstores, and entertainment venues. Retailing matters, but its orientation is to specialty foods or wines, boutiques, and outdoor stores that serve the active life of the new inner city residents.
The interest of affluent young professionals in downtown living finds confirmation in a Brookings Institution study of census data by Eugenie Birch, Professor of City and Regional Planning at the University of Pennsylvania. In a sample of 44 cities, downtown population grew by ten percent in the 1990s and the number of households expanded 13 percent, a substantial recovery after years of decline. In 2000 25 to 34 year olds compose a quarter of downtown populations, up from 13 percent 30 years earlier. The proportion of downtowners having a bachelor’s degree rose to 44 percent by 2000, a figure that exceeds both that for cities as a whole and their suburbs. The young and the educated moving downtown are exactly those groups where post-material values predominate. More recent studies confirm that this is a continuing trend.
Millennials are doing the environment a good turn in their propensity to live in dense, walkable, energy efficient urban communities and their reduced desire for motor vehicle ownership and driving relative to their older peers. If Millennials continue these behavior patterns into the future, they will possess a lower carbon footprint than the older generations that they will ultimately replace. Because central city living results in a substantial reduction in per capita energy consumption and carbon emissions in comparison to the suburbs, a redistribution of population from suburbs to central cities will be good for the environment as will increases in suburban population densities in response to Millennial demand for walkable communities. The prospect for such changes gives us a measure of hope for our environmental future no matter what happens in the political arena.
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Such trends are important for bringing climate change to a halt, but, as is becoming increasingly clear, concrete action to reduce greenhouse emissions on a global scale is required to stabilize our climate and environmental future. While the state of the global environment failed to take center-stage in the 2016 U.S. presidential election, that election mattered by putting Trump administration climate-change deniers in charge of a big chunk of the global climate chicken coop. This election has given them the power to bring to a halt government efforts to reduce greenhouse emissions by U.S. withdrawal from the Paris Climate Accords, halting implementation of the Clean Power Plan, and rolling back regulations requiring improvements in motor vehicle energy efficiency know as the CAFE standards. These actions will increase emissions of the world’s second largest greenhouse gas polluter, the U.S., and will give other nations license to dampen their own emission control efforts. Fortunately, these are actions that can be reversed by future presidents. The targets of the Clean Power Plan to reduce emissions will likely be met in the future as the consequence of coal being displaced by natural gas in the generation of electricity irrespective of what the Trump Administration does simply because natural gas is cheaper per unit energy than coal and emits about half the amount of greenhouse gas emissions as coal. Bring back coal in the face of market forces looks like a pipe dream. CAFE standards can be tightened by a future pro-environment president enough to makeup for any short-term losses in emission reductions and the Paris Accords rejoined. Better yet, a future president can put a price on greenhouse emissions, much like the states of California and Washington, stimulating both emissions reductions and the creation of a job-intensive clean energy sector.
In short, our political future matters for the sake of our global environment, and here is where the Millennials, and younger generations in general, come in. If younger generations are stronger environmentalists than older, then we can have hope for our environmental future. Of course they have to vote for a pro-environmental president in the future, but the 2016 Election and the Bernie Sanders phenomena demonstrated this willingness. even though they were not excited by Hilary Clinton, Millennials supported Clinton to a greater extent than older voters.
The question is, where do Millennials stand on the environment relative to older generations? A recent survey by PEW doesn’t offer much optimism on this question. In early 2014, in asking what describes them very well, 32 percent of Millennials described themselves as “an environmentalist” while the same number was 42 percent for both members of Generation X and the Baby Boom Generation. The results of the World Values Survey, administered 2011-2014 paints a more nuanced picture of where Millennials and others stand on the environment, as we will now see.
The data source used in the following analysis comes from wave 6 of the World Values Survey, a global sample survey of a full array of human values under the auspices of the World Values Survey Association composed of 100 member countries. For a full explanation of the methodology behind the survey, go to the World Values Survey web site, http://www.worldvaluessurvey.org. The well-regarded survey is funded by member countries and a variety of foundations and administered in person to a randomly selected set of respondents by professional staff and is confined to adults 18 and older. Wave 6 covers 60 countries and a total sample of 86,274 respondents, including 2,232 in the U.S. The survey includes more than 200 discrete questions on demographic characteristics, such as respondent age, number of years of educational attainment, relative income, and gender, and a huge number of value-oriented inquiries such as a self-ranking of political preference on a left-right spectrum, respondent expressions of environmental concern, and reports of participation in environmental actions. These sorts of questions are of special interest to us here, in addition to one about postmaterialism, which will be described later.
Successive waves of the World Values Surveys contain more discerning questions about respondent attitudes and practices towards the environment. The latest wave (wave 6), asks respondents questions not just about respondent environmental concerns, but more importantly about concrete actions taken in support of the environment. The common refrain, “actions speak louder than words,” is certainly worth considering in any inquiring into political support for the environment. The Pew study sticks instead to a general question about whether or not respondents describe themselves as environmentalist without any reference to what that means.
Environmental concern can be measured from the World Values Survey result using a two part question that requires a tradeoff between environmental protection and economic growth. Each respondent chooses one of the following two statements that best reflects their attitude: (1) Protecting the environment should be give priority, even if it causes slower economic growth and some loss of jobs; (2) Economic growth and creating jobs should be the top priority, even if the environment suffers to some extent. In posing this question, the World Values Survey gives the issue of environmental concern a specific context by eliciting attitudes towards the environment relative to the economy.
Of all respondents who answered this question, 46 percent of Millennials gave the environment priority over economic growth while only 36 percent of older generations did so, a comparatively large and statistically significant difference. Millennials are more willing than their older peers to sacrifice economic growth for improvements in the environment.
Three different questions in wave 6 provide measures of actual respondent behaviors directed at environmental improvement, including whether the respondent (1) is an inactive or active member of an environmental organization, (2) has recently given money to an ecological organization, or (3) has recently participated in a demonstration for some environmental cause. Of all respondents, 13.2 percent of Millennials report being inactive members of an environmental group while 12.7 percent of older generations do the same. In the case of active membership, the figures are 4.2 percent for Millennials and 4.9 percent for older generations. In both cases, the differences are relatively small and not statistically significant. Millennials and their older peers participate in environmental organizations at nearly the same rate.
In contributing to ecological organizations and attending environmental demonstrations, Millennials and their older peers part company. Of Millennials, 14.7 percent contributed to an ecological organization, but they were outpaced by the older peers of which 19.7 percent contributed. On the other hand, 10.3 percent of Millennials attended environmental protests while only 4.8 percent of older generations did so. Older generations give money while younger generations protest. This is an unsurprising result in light of the higher income levels of older generations and the inclinations of youth for direct action.
From these World Values Survey results, Millennials look to be at least as environmentally oriented as their older peers, and in their willingness to sacrifice economic growth for the environment and to demonstrate on behalf of the environment, more so. This is especially important in light of the timing of this survey. Millennials appear to have been hit hard by the Great Recession ending in 2009 and by the survey year, 2011, the economy had only begun to recover. Given the economic hardships and uncertainties they face, it is especially surprising that Millennials are willing to sacrifice economic growth for the sake of the environment more so than others.
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The desire of Millennials for downtown living and their commitment to the environment hint at a basic shift in values in comparison to older generations. A value shift of this kind is the subject of a lengthy line of research on a concept coined as postmaterialism by University of Michigan Political Science professor, Ronald Inglehart. Postmaterialist research hypothesizes that economic and social conditions prevailing as we grow up deeply shape our fundamental outlook for life. As one generation replaces another over the long haul, the predominance of particular social and political values in the population as a whole will change in accordance with divergent generational experiences. Research on postmaterialism finds that younger generations are less oriented to materialist economic values than their predecessors if steady improvements in personal and economic security occur for successive generations in their formative years. Advancements in economic and personal security allow the young to begin adult life at a more elevated point in Abraham Maslow’s famous hierarchy of needs which includes (1) the basic needs such as food, drink, sleep, and sex; (2) the need for safety; (3) the need for a sense of belongingness including love, affection, and acceptance in a community; (4) the need for self-esteem flowing from prestige and social status; and (5) the need for self-actualization including being creative or accomplishing worthwhile purposes in life. Coming of age in prosperous and secure circumstances allows one to seek the higher needs instead of having to worry about social disruptions of terrorism or war, crime in one’s neighborhood, or where the next meal is to come from.
The notion of an empirical measure of postmaterialist values originates with Professor Inglehart whose work in the 1970’s sparked a wave of academic research that continues to this day. A 12-item index of postmaterialism is constructed from data obtained through surveys that ask about respondent social priorities. Suppose you attach high priorities to such social goals as (1) protecting freedom of speech, (2) giving people more say in important government decisions, (3) seeing that people have more say about how things are done at their jobs and in their communities, (4) trying to make our cities and countryside more beautiful, (5) progress toward a less impersonal and more humane society, and (6) progress toward a society in which ideas count more than money. Then you are a postmaterialist. Suppose instead you attach high priorities to such goals as (7) maintaining order in the nation, (8) fighting rising prices, (9) a high level of economic growth, (10) making sure this country has strong defense forces, (11) a stable economy, and (12) the fight against crime (World Values Survey Association, 2015). In this case you are a materialist. If your priorities are mixed you lay on a spectrum between.
Research by Inglehart and others infers that if you are in your twenties, you are more likely to be a postmaterialist than if you are in your seventies. If you are currently young, you probably grew up in a period of economic prosperity, and if you are older you most likely faced economic deprivations in your pre-adult years. In general, younger generations in Europe, America, and the prosperous Asian countries experienced secure economic conditions in their youth while older generations suffered material challenges when they were growing up. Because our basic values are formed by the time we reach adulthood, whether or not we face economic scarcity or social upheavals in our youth matters. As we age, our value orientations fluctuate to some extent with economic and social conditions according to research findings by Inglehart, but our basic outlook doesn't change much relative to other generations. The overall level of the postmaterialism index will fluctuate with economic and personal security conditions (period effects), but the negative relation between age and the index will remain (cohort effect) and each cohort will retain on average the index magnitude established in their youth. Those with materialist leanings in their youth keep them for life just as postmaterialists retain their basic values. Statistical support for the negative relationship between age and indices of postmaterial values can be found in research articles by Inglehart and others. The World Values Survey data set reports a calculated 12-item postmaterialism index constructed from three sets of respondent rankings of social priorities with two materialist and two postmaterialist options in each set. Respondents to the survey are asked for their highest and second highest social priority for each set, and the postmaterialism index is simply the sum of postmaterialist choices.
The hypothesis of a shift to postmaterialist values by younger generations is confirmed by the World Values Survey wave six data for the U.S. The average postmaterialism index for Millennials is 2.17 on a possible spectrum ranging from 0 to 5, but it is significantly lower for older generations whose mean index measures 1.88 (Note that for statistical reasons one of 6 first and second choice postmaterial options is excluded from the final index). Briefly put, younger generations express support for placing postmaterialist, other-oriented social goals above materialist self-oriented purposes to a greater extent than older generations. As younger generations replace older over time, support for postmaterial, other-oriented social goals will become more prevalent in the society at large.
Postmaterial values unsurprisingly turn out to be important in explaining expressions of environmental concern and participation in actions to protect the environment. Research findings support the hypothesis that individuals in the U.S., and the World as a whole, who possess postmaterial values are more prone to express concern for the environment and to engage in personal actions in support of the environment. Younger generations are more postmaterialist than older in both the U.S. and around the globe, and as younger generations replace older over time, support for the environment will increase. This is a source of environmental optimism, but unfortunately it operates only over the long-run. Doing something about climate change, the most threatening environmental problem we face today, requires action over a time frame that shortens daily.
***
This brings us to the 2016 elections. Speculating about whether Bernie Sanders could have beaten Donald Trump in the presidential race is not particularly fruitful at this point, but we can take heart for the environment from some of the voting patterns. First, Millennial support for Sanders in the primaries was surprising and amazing. In my own state, Wisconsin, Sanders bested Clinton 56 percent to 43, and, according to exit polls, 18-29 year old Millennial voters went overwhelmingly for Sanders over Clinton 82 to 18 percent. Note that in this election white males without college degrees supported Sanders 59 percent to 41 percent. This is precisely the group that served as the backbone of support for Trump and helped cause Clinton’s loss of Wisconsin in the general election, one of the states the Democrats expected to win. Second, even though Millennials were not enthusiastic supporters of Hillary Clinton in the general election, those who voted supported her at a higher rate than any other age group. According to exit polls, 55 percent of 18-29 year olds voted for Clinton to 37 percent for Trump, and 50 percent of 30-44 year olds favored Clinton while 42 percent voted for Trump. Older age groups gave majority support to Trump and won him the election. Finally, Millennials are more liberal than older generations and more inclined to vote for Democratic presidential candidates as demonstrated by their strong support for Obama in the 2008 election. Data on self-expressed positioning on a left-right political scale from the World Values Survey lends support to the notion that Millennials favor a liberal political ideology. The scale ranges from 1 to 10 with 1 being most liberal and 10 most conservative. The average value of the score for Millennials is 5.59 and for older generations 5.84. Millennials fall to the left of older generations, and the difference is statistically significant.
I am no political strategist, but it looks to me like we need an anti-Trump political movement, one drive by the energy of youth, to both oppose his specific actions over the next four years and to defeat him in the next presidential election. This is our best hope for the environment, and for a host of other issues central to our social well being—universal health care, a living minimum wage, good jobs for all comers, universal access to a decent education, and more. I now think Bernie Sanders had the collection of ideas and proposals that garners support across red states and blue, and most importantly his ideas found an enthusiastic hearing among Millennials who now have an opportunity to take us all into a better future.
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