Part 3 Section II in the Series
Ecoism provides innovation incentives in both the for-profit and non-profit business sectors, protects the National Economy through appropriate tariffs on imports, supports the environment through a circular production system that focuses on a waste-less product life cycle and emphasizes localization, provides Citizens with equal access to intrinsic element goods and services, and ensures equitable and just compensation to all Citizens through National standards and regulations.
The economic side of Ecoism combines a regulated private for-profit business sector, a government (tax) funded and regulated national public non-profit business sector run by private citizens, and a regulated community subsidized private non-profit business sector.
The determination of what organizations comprise the Community Commons (private non-profit businesses) will be decided by the citizens who reside in that community (village/town/city). The types of organizations a community might choose to support could be child daycare centers, recreation centers, tool libraries, book libraries, seed banks, animal shelters, community nature parks, etc. The operational funds for these organizations come from a variety of sources – revenues generated from the sale of goods and services, donations from private individuals, and the Community’s share of the Region’s net profit distribution.
As mentioned in the Money for Living section, for-profit organizations contribute 25% of their net profits to the Community Commons. These contributions are collected from the Region (Time Zone) by the Regional Government and redistributed to each Community on a per capita basis. This redistribution provides all communities with a more equitable distribution of funding than would otherwise be the case if each community relied exclusively upon itself. The Equitable Community Profit Sharing is structured as follows:
The total share of net profits collected each tax year by the Region is placed in a Regional Community Commons Trust. The distribution of those funds to communities occurs no later than three months after the annual tax return due date. Each Community receives their share based on their total population as it relates to the total Regional population. For example: The total funds in the Trust are $1 billion, the total Regional population is 10 million, the Community’s population is 250,000; $1,000,000,000 / 10,000,000 = $1,000 x 250,000 = $250,000,000 for this Community.
The Community then redistributes its share to the Private Non-Profit Organizations according to their prior year’s revenue generated from sales and private donations (excludes funds received from the profit sharing pool). For example: All Community Commons organizations had revenues of $500,000,000; Organization X had revenues of $50,000; Organization X’s revenue is 0.01% ($50,000 / $500 million) of the Community Commons total revenue; the total Community Profit Sharing Pool is $250,000,000; Organization X receives $25,000 (0.01% x $250 million).
Private Non-Profit Organizations are required to funnel 50% of all revenue toward the community programs and services they offer after operational costs have been met. The remaining 50% of revenue can be directed toward resilience reserves and investments that support the expansion of the benefits they offer their community.
The process by which Communities determine what Community Commons Organizations they wish to have within their community will be covered in part 5 of this series – Governance.
The National Public Non-Profit Sector funded by taxes (Wealth Income Tax, Commercial Land Use Tax, and Customer Transaction Tax – these will also be covered in part 5 of this series) would comprise institutions such as healthcare, education, banking, courts of law, civil peacekeeping and law enforcement, natural disaster response (firefighting and rescue organizations), energy grid facilities, Wildlife Conservation Land maintenance, etc. Most Organizations would be run by private citizens via contracts with government oversight; some Organizations, such as the Military, would be run by government personnel. All contracts would be subject to the Survival level price restrictions as specified in the Market Price Regulations. Any services provided to Citizens by the National Public Non-Profit Sector will not be subject to competition from the private for-profit or non-profit business sectors.
Business sectors that are marked for the National Public Non-Profit designation are those that are critical for a highly functional society and of which the entire society needs either access to or is impacted by the manner in which they operate. Additionally, in order to ensure all Citizens receive a similar value from these Organizations, it is important to standardize their operations and distribute funding evenly. Because these sectors are embedded within each and every Community, a large pie section of funding is needed; this is best accomplished through National taxation and redistribution. Redistribution of funding would flow from the National Government into the Regional Government (according to Regional population) where it would be redistributed according to Community population and budgetary needs. Communities would submit their proposed budgets for these sectors to the Regional Government each year. The process the Regional Government would undertake would be as follows:
- Calculate the percent of the funding pool based on per capita per Community
- Assess the budget requests per Community as it relates to that Community’s slice of the funding pool pie.
- Distribute the total budget request if it was equal or less than the per capita amount; if the request was more than the per capita amount, then the Community would receive the per capita basis amount of funding.
- When there is a surplus of funds, that surplus would be carried over to the next year and be included in that year’s Regional redistribution. As there are variations in how much revenue is received through taxation, surpluses help augment years that have leaner collections.
The Community budget formulation for these public funds would be tied to certain criteria such as age and condition of related buildings, equipment, etc. The Government would be responsible for conducting regular audits to ensure public funding was being appropriated in accordance with established guidelines.
National Public Non-Profit organizations are also responsible for providing employment under the Guaranteed Jobs Program. Any Citizen that becomes unemployed for any reason may request suitable employment through this Program. Wages for work performed under this Program are paid at the National Minimum Wage regardless of position responsibilities and qualifying criteria. Employment is guaranteed for a full time schedule but can be reduced at employee’s written request. While there is no maximum time period, employment under the Guaranteed Jobs Program is intended to be temporary while the Citizen seeks regular employment or pursues re-training; therefore, employees participating in this program are exempt from the annual Service Award Distribution. The Guaranteed Jobs Program is also a key index used in the application of the Modern Monetary Theory to assess the flow of money as it relates to inflation.
The Private For-Profit Sector consists of all other business types not included in the Community Commons or the National Public Non-Profit Sector such as insurance, construction, agriculture, manufacturing, etc.
To address finite natural resources, climate change (mostly attributed to carbon dioxide (CO2) emissions), and pollution (water, air, and soil) attributed largely to commercial practices, a different system of production and consumption is indicated. Moving from a linear economic model to a circular economic model is gaining widespread support across the globe.
“A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the ‘end-of-life’ concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models.
Such an economy is based on few simple principles. First, at its core, a circular economy aims to ‘design out’ waste. Waste does not exist—products are designed and optimised (sic) for a cycle of disassembly and reuse. These tight component and product cycles define the circular economy and set it apart from disposal and even recycling where large amounts of embedded energy and labour (sic) are lost. Secondly, circularity introduces a strict differentiation between consumable and durable components of a product. Unlike today, consumables in the circular economy are largely made of biological ingredients or ‘nutrients’ that are at least non-toxic and possibly even beneficial, and can be safely returned to the biosphere—directly or in a cascade of consecutive uses. Durables such as engines or computers, on the other hand, are made of technical nutrients unsuitable for the biosphere, like metals and most plastics. These are designed from the start for reuse. Thirdly, the energy required to fuel this cycle should be renewable by nature, again to decrease resource dependence and increase system resilience (e.g., to oil shocks).
For technical nutrients, the circular economy largely replaces the concept of a consumer with that of a user. This calls for a new contract between businesses and their customers based on product performance. Unlike in today’s ‘buy-and-consume’ economy, durable products are leased, rented, or shared wherever possible. If they are sold, there are incentives or agreements in place to ensure the return and thereafter the reuse of the product or its components and materials at the end of its period of primary use.” – Towards The Circular Economy, a report commissioned by the Ellen MacArthur Foundation
To learn more about a Circular Economy including case studies, visit the Ellen MacArthur Foundation.
Localization is another major piece of our economic structure. The concept refocuses the provider and consumer of goods and services from a national and global market to local markets whenever practical. In this model, Communities produce as much as possible of the Survival and Comfort products needed by their community within the community. This local focus supports small businesses, local employment, reduced transit distances for goods, reduced commutes for workers, and fresher more nutritious food. Some types of products are best suited to mass production and larger geographical markets – the manufacture of automobiles (most models would be considered a Comfort product) would be one example. An adequate geographic market for an automobile manufacturing plant might be one Region (Time Zone) or it might need to be the entire nation in order to generate enough sales to support its operating costs and render a sufficient profit margin. Broader (including Global) trade would still exist but would be limited to surpluses (excess of local needs) produced intentionally to offer to geographical areas that are unable to produce their own in adequate quantities or may not have access to the natural resources, climate, or technology conducive to producing that product. To learn more about localization, you can visit Local Futures.
Community design and planning will need to adapt to accommodate a circular and localized economic model.
The transition of industry to a circular and localized economic model may best be accomplished in segments. Beginning, for instance, with food production and energy generation; two economic activities that have substantial impact on climate change.
Moving to an Ecoist socioeconomic system will require the acquisition of new skills by those currently in the workforce and by those that will enter the workforce in the future. Education is next in our series.