GPCA Platform

Community-Based Sustainable Economics




The keystone of the Green Party's economic program is community-based economics. As an alternative to an economy owned by either government or gigantic corporations, Greens favor a Jeffersonian model with ownership and control spread as widely as possible among Californians. Another key value for establishing our economic program is ecological wisdom. We stand in contrast to the dominant political perception that our nation can have either economic vitality or ecological sanity. It is our firm belief that these entities are not mutually exclusive. The Green Party is focused on creating a new economy. The two major parties legislate with the goal of serving the special interests that control them. The result is small variations on the theme of maintaining the status quo. So long as the focus of our economy is on profit and corporate growth, we will not be able to protect and respect ourselves and our resources. We must shift our focus to people, sustainability, and economic justice.

Economic value should reflect our social values. We must look to creating sustainable communities. Communities that are maintained by the people in them in partnership with truly local businesses. When profits are taken out of communities, the responsibility for damage done to the community must follow those profits.

In 2001, California surpassed France and is now the fifth largest economy in the world. Therefore, a change of focus at the state level can literally be an example to the World.

Our centralized monetary policy has evolved into a controlling and regressive force. It is not a system that serves the community as a medium of exchange and a store of value. We must restore the connection between real value and money and not allow manipulated "market forces" continue to enrich only a privileged few.

We must move in a direction where the gap between rich and poor actually narrows rather than increases. To accomplish this, we must foster the growth of programs and structures designed to keep money in the communities where it is made.

People who have real goods and services to provide have no outlet, except conventional commercial businesses. These people are not motivated to provide value to the communities they serve. Rather, they are encouraged through business regulations and tax law to create and grow corporate structures. These structures often remove value from the community and reduce people's responsibility to it.

To foster local economic diversity, economic justice and to stimulate individual productivity, the Green Party advocates refocusing the economy:

Encourage ecologically sound and employee-owned or profit sharing businesses of appropriate scale. Such businesses would primarily serve a regional market. This would keep money circulating within the community, rather than sending it to distant corporate headquarters. To further such enterprises, we advocate "incubator programs" and other forms of assistance, as well as "Buy Local, Buy Green" campaigns. Establishing workplace democracy must also be promoted.
Corporate profits cannot be transferred out of a geographical region to another part of that corporation in an attempt to avoid bankruptcy or other such financial problems. Rather, the corporation owes a dollar-for-dollar responsibility to that area for any money transferred out. In our recent past we have seen too many out-of-state parent corporations and corporate officers enrich themselves and leave a company bankrupt. Employees and pensioners must be first in line, not last.
Encourage neighborhood non-profit development corporations that work to establish community-based economics and affordable housing, rather than the usual redevelopment fixation on huge projects in the downtown areas of cities. While redevelopment schemes do, in fact, pump money into local economies, that money comes at the cost of empowering and enriching large development companies that have no local ties. So, in the long term, those companies siphon money from the community.
Support the creation of cooperative and collective businesses. One way to encourage this would be to free non-profit and locally-owned businesses from the overly complex tax and regulatory structures designed for profit-making corporations. This could be paid for by shifting the tax subsidies and loan guarantees that currently go into corporate welfare and channeling them back into the community. This would need to be done without dismantling the legitimate regulations that protect workers.
Encourage the development of informal economies within the law, including volunteerism and barter systems.
Encourage the American "intentional community" movement - residential communities composed of people who have come together for a common purpose and live with some degree of economic sharing.

We must insist on measuring the long and short-term benefits of government spending after the fact. Too often benefits are promised that never materialize but the spending continues.

We need a thorough analysis of the California State Budget from a perspective which emphasizes results for the people of the state. California, like other states and the federal government, struggles to avoid budget deficits. The great bulk of expenditures in this state are for education (44%) and welfare (26%). While the Greens advocate adequate funding for these areas, we question whether this is being accomplished effectively.

We must examine the results that are achieved by the centralized bureaucracies that manage our welfare and education systems. Are they responding to the needs of the people in the state? It would seem not. The most dramatic example of this lack of responsiveness in recent years was the state's loss of 597 million federal dollars provided to pay for health insurance for the hundreds of thousands of uninsured poor children in the state. There are many reasons for this missed opportunity, but one of the most telling is that there were simply not enough state employees reaching out to the families of eligible children and helping them enroll. During the period that these funds were available California ranked 50th out of the 50 states in the number of state government employees per 10,000 people. We are not advocating increasing needless government bureaucracy, but it was "penny wise and pound foolish" to allow over half a billion dollars in federal money to remain unclaimed and allow approximately 300,000 children to go without health insurance in part because we wouldn't hire more out-reach workers.

Increasing expenditures for prisons are also a concern. Over 6% of state expenditures in 1999, this category of expense is more than double that spent by the state on its environmental protection agency and consumer services units combined.

The Green Party calls for effective government spending:

Conduct cost-effectiveness studies of the major departments in state and local government.
It should be part of the responsibility of state government to communicate how it is spending the public's money in ways that are accessible to the public
Make strategic social investments to avoid much greater future costs. For example, investing in public power, quality education and social programs. Providing effective family planning services will avoid later costs associated with neglected children.
Stop the enormous expansion of the prison industry, which is resulting in this being a disproportionately large item in the state budget.

When we give tax breaks to polluters, we cannot say we are serious about cleaning up the environment. When we allow massive harm to people and the environment in the name of industrial production, we must recognize that harm as a cost we all bear.

Large corporations are held accountable by their shareholders to provide an economic return on the shareholder's investment. This motivates the corporations to focus on revenue growth at the expense of just about everything else. Even breaking the law can be justified when the fine for being caught is less than the profit to be made. Expecting businesses to voluntarily incur any significant costs on behalf of the communities they are in or the environment they exploit is completely unrealistic. There are, however, two ways to motivate the business community to act responsibly towards the people and the Earth. One is true cost pricing and the other is appropriate taxation.

Under our current accounting and pricing system, many commonly used products carry hidden environmental and social costs such as air and water pollution, deforestation, and toxic waste. These costs are created during the production, use, or disposal of the products. While the producer internalizes revenue and profits from these products, the costs are externalized to society and the natural environment. This externalizing of costs may make the consumer price low, but we all pay for it eventually through adverse health effects and reduced quality of life. In this way, externalized costs equate to a subsidy. Artificially low prices on subsidized products encourage their over-consumption and, therefore, the under-consumption of environmentally sound products.

When taxes are levied against labor, using labor in production is more expensive and is therefore a disincentive for employment. This also diminishes the economic value of labor by decreasing the worker's purchasing power, thus discouraging work.

Our property tax system is full of inequities and disincentives. In 1978, Proposition 13 took the burden off property owners including corporations. It has resulted in an unequal and unfair burden on equivalent properties and on residential as compared to commercial properties, as well as an increased dependence by governments on the more regressive sales tax.

True Cost Pricing

True Cost Pricing (TCP) is an accounting and pricing system that relates to the Green values of ecological wisdom, sustainability, future focus, and social justice.

The inclusion of all costs into the price of a product would make more-ecologically-sound products cheaper to the consumer in terms of market price and the demand for these products would increase. Also, various cultural / traditional industries that have been marginalized by unrestrained technology could flourish.

For example, with solar power, if all the costs were considered (oil spills, air quality regulation, health care, massive subsidies to the oil, gas, coal and nuclear industries), solar power would clearly be the cheapest alternative. Also, in the cattle industry, which is known to be severely detrimental to the environment, we subsidize the industry with free or cheap grazing land and water subsidies and we pay for the environmental aftereffects.

Many of the laws that exist to prevent environmental and social damage are not adequately enforced. Examples include smog checking of vehicles, and tobacco taxes and court settlements, which are not being used as intended.

The Green Party calls for the implementation of true cost pricing:

The concept of true costing, as a part of cost / benefit analyses, should be a basis for decisions on government projects and in Environmental Impact Statements.
Integrate the concept of TCP into domestic industrial policies and regulations, and likewise, promote it in international trade agreements.
Enforce laws that exist to prevent environmental and social damage.
Provide education to explain that TCP incorporates the true life-cycle cost of a product. It will result in a net decrease in consumer prices as less damaging practices are adopted.
Implement product labeling to inform consumers of the total cost of the product's ingredients and manufacturing process.
Establish an information clearinghouse, consultant's network, and other communication channels for the exchange of information about ecologically benign techniques.
Recognize that TCP may have short term impact on people of lesser financial means and implement measures to mitigate these effects.

Taxation

Taxes pay for important public services. The main purpose of taxes is to collect revenue to pay for these services. Other purposes are to discourage undesirable behavior and to encourage desirable behavior and to more equitably redistribute income. Any shift in tax policy must be done gradually. so that people and government can adjust to the changes. Also, changes should move toward appropriate scale of collection and use of taxes.

The basic tax policies of the state should be to foster a more equitable progressive tax structure, as opposed to the present regressive nature of California taxation which levies the heaviest burdens on those least able to pay. Sales, corporate and income taxes should be adjusted to relieve the burden on those less able to pay and increase the burden on large and multinational corporations and the super wealthy, who do not pay their fair share. Also, corporations receive tax breaks that promote growth and the consumption of resources rather than sustainability and social responsibility.

We propose:

Income, Sales and Corporate Taxes

A more progressive income tax: Raise the state income tax for higher income people. Also, reduce income taxes for low-wage workers to encourage people to seek employment rather than relying on public assistance.
A much higher gasoline tax to replace much of the sales tax, which generally has reached unfairly high levels in California.
Encourage the enactment of the Tobin tax on financial transactions. This tax, first proposed by a Nobel prize winning professor at Yale University, treats financial transactions across borders as taxable events.

Offsetting Regressive Taxes

Decreases in some taxes to offset the regressive nature of other taxes, such as the gas tax. Reduce Income tax for low-wage workers.
Decrease taxes on labor as opposed to capital. (Exception: Energy, pollution and other environmental excise taxes should be increased.)
Decrease the cap on the mortgage tax deduction in both federal and state income taxes.
Reinstate the renters tax credit on the state income tax.
With corporate tax policy, shift investments away from such things as automating the production of disposable products, which reduces the number of jobs. Also, discourage leveraged buyouts and mergers which extract working capital. Instead, we must promote community development and job creation.

Property Taxes

Reform Proposition 13 and replace it with a fairer distribution of property tax burden. Increase commercial property taxes compared to residential taxes and tax equivalent properties the same.
Increase the total property tax contribution to government financing relative to sales and income taxes.
Look into the relative impacts of the current property tax system versus a tax system based on the value of the underlying land.

Revenue Neutrality

We should aim for revenue neutrality in the tax changes we implement. We are not proposing a bigger overall role for government. However, there are some situations where certain priority activities are under-funded.

People whose livelihoods depend on supporting remote, multi-national corporations cannot be expected to support changing the system. There's plenty of work to do that does not jeopardize our future, does not widen the gap between the richest and the poorest in our society and that can enrich our communities. We must encourage the creation of these opportunities.

We propose a third alternative to "a job or no job." That is providing everyone a sustainable livelihood. The need of our times is for security, not jobs necessarily. We need security in the knowledge that while markets may fluctuate and jobs may come and go, we are still able to lead a rooted life in dignity and well-being.

The concept of a "job" is only a few hundred years old; and the artificial dichotomy, between "employment" and "unemployment", has become a tool of social leverage for corporate exploiters. This produces a dysfunctional society in various ways:

It is used to justify inserting harmful industries into rural communities. For example, extensive prison construction and clear cutting of pristine forests.
It has been used to pit workers (people needing jobs) against the interests of their own communities.
It has created a self-esteem crisis in a large segment of the adult population, who have been forced into doing work that is irrelevant, socially harmful, environmentally unsound, or some combination of the three.

The Green Party will also promote policies that have job increasing effects. Many people will still need jobs for their security. We need to counterbalance the decline in jobs caused either by new technology, corporate flight to cheaper labor markets outside our borders, or through the disappearance of socially wasteful jobs that will inevitably occur as more and more people embrace a green culture.

To begin the transition to a sustainable system, we support:

Right Livelihood

The creation of alternative low consumption communities and living arrangements, including a reinvigorated sustainable homesteading movement in rural areas and voluntary shared housing in urban areas.
Universal health care requiring coverage for all people in California.
The creation and spread of local currencies and barter.
Subsidizing technological development of consumer items that would contribute toward economic autonomy for individuals, such as renewable energy devices.
Setting up local non-profit development corporations.
Providing people with information about alternatives to jobs.

Creating Jobs

Reducing taxes of labor. This will make labor more competitive with energy and capital investment. [see Taxation above]
Solidarity with unions and workers fighting the contracting out of tasks to part-time workers in order to avoid paying benefits and to break up unions.
Adopting a 30-hour work week as a standard. This could translate into as many as 26 million new jobs.
Subsidizing renewable energy sources which directly employ 2 to 5 times as many people for every unit of electricity generated as fossil or nuclear sources yet are cost competitive. Also, retrofit existing buildings for energy conservation and build non-polluting low impact transportation systems.
Supporting small business by reducing tax, fee and bureaucratic burdens on them. The majority of new jobs today are created by small businesses. This would cut their mortality rate and help them create more.
Changing our foreign trade policies to minimize the exportation of jobs to other countries. [see International Trade Agreements plank]

Our current systems of measurements focus on growth at the expense of all else. We must focus on creating measures that tell us how we are doing in terms of building a sustainable world for everyone. When businesses file environmental impact statements that promise that their plans will not hurt the community, this must be measured after the fact. And they must be held accountable if they were wrong.

The corporate market system is based on a competitive struggle to exploit people and nature for profit. Such measurements as the GDP (Gross Domestic Product) perpetuate the idea that the economy should be measured by, and hence focused on, growth and output. But there are many perspectives from which to measure the economy and not all of them focus on profit. One way to measure the economy is to asses the value of non-monetary goods and services and to measure the rate of infant mortality, life expectancy of people, educational opportunities offered by the state, family stability, environmental data and health care for all people. Another is to quantify what human benefit (in terms of education, health care, elder care, etc.) is being provided for each unit of output. Measuring the gap between the most fortunate and the least fortunate in our society, for example, tells us how well or poorly we are doing in creating an economy that does not benefit some at the expense of others.

Still another useful measurement would tell us what additional costs, external to the direct production process, are incurred to achieve the production of goods and services. These external costs are borne by local communities and society as a whole. For example, the nation's largest oil spill (the Exxon Valdez in Prince William Sound) was a boon to Alaska's overall GDP, but the spill's cost to the environment, and to the many people affected, was too high a price to pay.

In a local example of external costs, incidents of toxic leaks at refineries in Richmond, California have had significant detrimental impact on the short term cost of health care in Richmond and the long term health status of the community. This is reflected as short term costs to the community in the form of lost days of work and school.

The Green Party will work for a more just economic measurement system:

Devise economic monitoring systems that measure a business's total costs to the environment and society.
Some of these costs can not be expressed in monetary terms, but various accounting techniques are being developed to represent such costs. We support these efforts and will encourage their implementation to augment or replace the GDP. [see Creating the Right Incentives plank]
Account for not only environmental costs, but also social costs such as substandard wages and working conditions.
Classify activities such as volunteerism, domestic work and child rearing as contributions to the economy.
Require businesses and government agencies to determine what social and environmental effects their activities are having, and to make that information public. The assumptions made in these reports should be backed by money put in escrow in case they prove to be inaccurate.
To respect and encourage diverse viewpoints about our economy, California should experiment with measures to discover which ones have meaning to people in terms of representing their view of the value of the economy. For example, if we divide the amount of money spent on public education in a 12-year period by the number of high school graduates from public high schools at the end of that same time period, have we created a meaningful measure? The answer can only be found if we create a climate where discussion and understanding of economic measures become relevant to the general public. The Dow Jones Industrial Average and the NASDAQ Composite Index have both regularly become front page news items. This proves that even abstract measurements of economic activity can become matters of public interest given the proper development and media exposure.

Insurance companies must focus on protecting people, not manipulating products to maximize profit. The artificial split between worker's compensation and employer-based health insurance removes value from both systems at the expense of workers.

In the State of California, the position of Insurance Commissioner is an office that is elected by popular election. For this reason, the economics platform of the Green Party focuses on the vision we propose for that office.

Insurance companies aggregate the risks faced by individuals and businesses and spread that risk across all similar policyholders. They justify prices based on these groupings. Except where the law prohibits it, these groupings are created to manipulate prices for the benefit of the company.

This is most apparent in the area of health care where the price for the same family of four differs depending on how they are trying to obtain their coverage. If the family is obtaining coverage through a large employer, insurance companies will have them pay one price; if they are buying through PacAdvantage - the California small business Health Insurance Purchasing Cooperative - they will pay another, and if they are trying to purchase the coverage as individuals, they will pay yet another price. That is if they are even able to obtain coverage as individuals. A recent (June 2001) study funded by the Kaiser Family Foundation and conducted by the Georgetown University Institute for Health Care Research and Policy found "The individual health insurance market is unpredictable, inconsistent and expensive. The benefits you receive and what you pay depend on your personal circumstances and the reaction of individual insurance carriers".

To promote fair and socially just access to insurance the Green party advocates the following:

Workers Compensation Insurance is an area where reform is long overdue. We must work to minimize the tremendous redundancies and inefficiencies in maintaining the medical component of worker's compensation insurance separate from employer sponsored health insurance.
We need to cooperate with other states on a multi-regional approach to regional disaster coverage. There may be legal obstacles to this. We need to make sure that those that offer Earthquake insurance are taking into account the subsidy they will receive from the Federal government if an affected area is declared a disaster area and becomes eligible for Federal funds.
It is important that we become aggressive in educating the public about Long Term Care insurance (LTCI). We should also be pro-actively examining the ways that Long Term Care Insurance (LTCI) is currently provided in places with more experience in it than we have. Alberta, Canada has developed reimbursement strategies for LTCI that attempt to reward keeping residents as healthy as possible.
We must have universal, single payer health coverage. Financial intermediaries do little or nothing to improve the delivery of health services and their role must be minimized.

Last updated: 07/23/2006 (BH)