COVID-19 is disrupting more than 70 years of population trends and setting back poverty alleviation by more than a decade.
The Cooperative Society Newsletter September 2021, Issue 31 by E.G. Nadeau, Ph.D.
This is the third in a four-part series of newsletter articles on the impact of the pandemic on major issues affecting progress toward a more cooperative society. The May article focused on economic concentration and wealth inequality. The July article was about conflict and democracy. The November article will look at the effects of the pandemic on the climate crisis.
This issue analyzes the impact of COVID-19 on global population trends and the quality of life around the world during the past year and a half.
COVID-19 is affecting the world’s population in several major ways. It is lowering the average lifespan, decreasing the birth rate, and slowing current and projected population growth.
Let’s take a look at each of these demographic changes.
The number of deaths worldwide from COVID-19 is expected to exceed 5 million sometime in October. This is probably an undercount, because some countries are attributing coronavirus deaths to other causes.
In the United States, there were almost 350,000 COVID deaths in 2020, and another 350,000 by the end of September or early October 2021. Deaths from the coronavirus are estimated to have reduced the average life expectancy of Americans by one and a half years in 2020, the biggest single-year decline in life expectancy since World War II. This reduction in average life expectancy does not include the effects of the 2021 death toll. COVID deaths among Blacks and Hispanics are substantially higher than among Whites in the U.S.
Life expectancy in many other countries has not been as dramatically affected by the coronavirus as it has been in the United States. ”It is impossible to look at these findings and not see a reflection of the systemic racism in the U.S.,” Leslie Curtis, chair of the Department of Population Health Sciences at Duke University School of Medicine, told NPR. “The range of factors that play into this include income inequality, the social safety net, as well as racial inequality and access to health care,” Curtis said.
The global birth rate has been declining each year since 1964. It is projected to drop off somewhat more sharply in the United States in 2021, and to a lesser extent, in a number of other countries as a result of the pandemic. According to a recent article in New Security Beat, “The pandemic has caused many young people to delay major life events, such as marriage. This delay will likely manifest in lower birthrates in the years to come. Likewise, pandemic-related unemployment and financial insecurity, particularly among young people, women, and marginalized groups, may cause further decline.”
The impact of the pandemic on lowered birth rates may continue for several years as the world economy gradually gets back on track.
Long-term demographic trends
In the remainder of the 21st century, the effect of COVID-19 on population change is likely to be a minor, but painful, blip. Longevity very probably will continue to increase gradually after the brief, virus-related, downward spike. The lower birth rate, however, may have a longer lasting, if modest, impact.
Independent of COVID, however, a group of analysts, writing in the prestigious medical journal The Lancet, recently projected a more rapid deceleration and then a downturn in world population growth in the remainder of this century:
Our findings suggest that continued trends in female educational attainment and access to contraception will hasten declines in fertility and slow population growth. A sustained TFR [total fertility rate] lower than the replacement level in many countries, including China and India, would have economic, social, environmental, and geopolitical consequences. Policy options to adapt to continued low fertility, while sustaining and enhancing female reproductive health, will be crucial in the years to come.
Primarily due to the effect of this projected lower birth rate, world population (now at 7.8 billion) is expected to peak at about 9.7 billion in 2064, and then decline to around 8.8 billion by 2100. This pattern of population growth and decline is likely to occur unevenly across the world, with some countries experiencing significant reductions in population, and others, especially many low-income countries, continuing to grow through most of the rest of the century. (The author will not go into an in-depth analysis or discuss the policy implications of these trends here, but will address them in future articles and the next edition of The Cooperative Society.)
Quality of life
There has been a recent slowdown in accomplishing the United Nations 17 Sustainable Development Goals (SDGs), including those directly related to the quality of life of poor people around the world, that began before the coronavirus. The slowdown appears to be the result of reduced commitment by some UN members, an overly ambitious agenda by the UN, and the magnitude of the climate-change crisis overshadowing other SDGs.
The first two sustainable development goals are, “End poverty in all its forms everywhere” and “End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.” This section of the newsletter focuses on the impact of COVID-19 on these two goals of ending poverty and hunger by 2030.
Extreme poverty, defined as, “Living below the international poverty line of $1.90 a day,” rose for the first time in over 20 years in 2020 as approximately 100 million people were pushed back into extreme poverty, bringing the total number of the world’s population in this category to about 730 million. Even though the World Bank recently projected that there will be a decrease of about 20 million people in extreme poverty in 2021, it will take several years to get poverty reduction back on its pre-COVID track. Despite the overall upward trend in 2021, many low-income countries in Africa will continue to experience an increase in extreme poverty this year, and thus suffer through a longer time period before they return to pre-COVID trends of extreme-poverty reduction.
Despite these grim data on COVID-related poverty around the world, there was actually a decrease in poverty in the United States in 2020. A headline in The New York Timesrecently reported that, “Poverty in U.S. declined last year as government aid made up for lost jobs.” The percentage of people living below the poverty line dropped from 11.8% in 2019 to 9.1% in 2020. This decline in poverty may not continue in the coming years if Congress doesn’t pass several anti-poverty measures this fall.
The COVID-related story for world hunger is much the same as that for poverty. According to the Food and Agricultural Organization (FAO) of the United Nations:
The number of people in the world affected by hunger continued to increase in 2020 under the shadow of the COVID-19 pandemic. After remaining virtually unchanged from 2014 to 2019, the PoU [prevalence of under nourishment*] increased from 8.4 percent to around 9.9 percent between 2019 and 2020, heightening the challenge of achieving the Zero Hunger target in 2030.
The above percentages mean that about 120 million more people were undernourished in 2020 than in 2019, bringing the world total to about 768 million. More than 80% of undernourished people live in Asia and Africa.
The conclusion that the FAO draws related to world hunger applies equally well to extreme poverty:
With less than a decade to 2030, the world is not on track to ending world hunger and malnutrition; and in the case of world hunger, we are moving in the wrong direction. This report has shown that economic downturns as a consequence of COVID-19 containment measures all over the world have contributed to one of the largest increases in world hunger in decades, which has affected almost all low- and middle-income countries, and can reverse gains made in nutrition. The COVID-19 pandemic is just the tip of the iceberg, more alarmingly, the pandemic has exposed the vulnerabilities forming in our food systems over recent years as a result of major drivers such as conflict, climate variability and extremes, and economic slowdowns and downturns. These major drivers are increasingly occurring simultaneously in countries, with interactions that seriously undermine food security and nutrition.
The United Nations recently held a world summit on food systems, in which, “. . . more than 150 countries made commitments to transform their food systems, while championing greater participation and equity, especially amongst farmers, women, youth and indigenous groups.”
But the summit was not without controversy. For example, in an article entitled, “The UN summit on food systems took two years to plan. It’s offered nothing to help feed families,” Michael Fakhri, UN special rapporteur on the right to food, made the following comment:
The Covid-19 pandemic has highlighted what we have known for decades – hunger, malnutrition and famine are not caused by inadequate amounts of food. They are caused by the political failures that restrict people’s access to adequate food.
COVID-19 has significantly contributed to a global reduction in longevity and the birth rate. It has also increased poverty and hunger around the world. The effects of these negative impacts are projected to last for a number of years. In particular, poor people, especially in Africa and Asia, will continue to experience economic hardship and undernourishment well beyond 2021. The optimistic UN goals of ”No poverty” and “Zero hunger” by 2030 will almost certainly not be realized.
It would be a mistake, however, to throw up our hands in despair at these recent setbacks. Since the UN Millennium Development Goals , the predecessors to the sustainable development goals, were first established in 2000, there have been dramatic improvements in the social, health-related, economic, and environmental well-being of hundreds of millions of people around the world.
The recent setbacks related to COVID-19 and other factors mentioned above can be overcome, especially through universal access to coronavirus vaccines, and a recommitment to the 17 sustainable development goals by the international community.
* Prevalence of undernourishment is “an estimate of the proportion of the population whose habitual food consumption is insufficient to provide the dietary energy levels that are required to maintain a normal active and healthy life.”
The Cooperative Society Newsletter May 2021, Issue 28 by E.G. Nadeau, Ph.D.
We have been writing about whether or not humans have been moving toward or away from a more cooperative society since 2016. The pandemic, which began in December 2019, has had a profound effect not only on our health and mortality, but on the world’s economy, political landscape, social well-being, and the environment. That impact is continuing in 2021, and very probably will have significant consequences in subsequent years.
We will talk about the effects of Covid-19 on our lives in three installments of The Cooperative Society Newsletter, beginning with this May issue and continuing in July and September.
First, a little background on The Cooperative Society Project.
There are three core premises to the Project:
We have reached a point in human history at which there are adequate resources for all human beings to experience a decent quality of life. Similarly, humans are now able to establish and maintain a sustainable relationship with nature. The problem is: We are not yet achieving these goals.
It is important to measure the extent to which we humans are moving toward a sustainable quality of life for all and a sustainable environment, and, when we are falling short, to take corrective action.
Achieving these goals does not depend on forces outside of our control. We have the power to shape the conditions of our lives and those of future generations. We are the agents of history, not its powerless subjects.
Following is an update on the first two of these variables – economic power and wealth distribution. The other five measures will be addressed in the next two newsletters.
Key questions To what extent has the pandemic affected the concentration of corporate and country-related domination of the world’s economy in 2020 and so far in 2021? Are checks and balances, along with alternative forms of business, being applied and planned to reduce the negative consequences of this concentration?
Importance of this measure As long as economic decision-making is dominated by the few, the rest of us are dependent on the choices that they make. This concentrated economic power is the primary cause of periodic, large-scale disruptions to the economy (for example the Great Recession of 2008-2010). It also has a significant impact on how we deal with crises such as those precipitated by the pandemic and global warming.
Major trends in economic concentration in 2020 and 2021:
The United States and China are headquarters for the world’s corporations with the largest combined market values. As of April 2021, the U.S. accounted for 35% and China 7% of the market value of the top 100 corporations in the world.
Due to the pandemic, the world gross product (WGP) – the combined value of the goods and services produced by all countries – declined by a little over 4% in 2020. The only other time in the last 50 years there has been a decline in WGP was in 2009 during the Great Recession, and the drop that year was only .1%.
These data indicate that the world’s most powerful corporations and the countries in which they are located became even more powerful during the pandemic. This was at a time when the rest of the world economy made a significant downturn.
The biggest factors that would reduce the power of these corporations are changes in the policies of International bodies such as the United Nations and the world’s most developed countries toward them. Tighter international anti-trust policies and enforcement of these policies, concerted efforts to thwart tax evasion by large companies, and progressive corporate taxation systems could reduce their inordinate influence on the world economy. Taking actions to strengthen small- and medium-size businesses, and including cooperatives and social enterprises, would also make a huge difference. These approaches to creating a fairer world economy in the post-pandemic era are increasingly being discussed by world leaders, including President Biden, but so far, there has been little action.
Key question Is the distribution of wealth becoming more or less unequal around the globe?
Importance of this measure The concentration of wealth has consequences for everyone’s economic and social well-being. Large differences in wealth and income mean that many of us earn less, receive fewer social benefits, and have less influence over the political decision-making that affects our day-to-day lives than we would have in a more equitable society. Inequality also leads to social unrest and conflict.
Major trends in wealth inequality during the pandemic:
We could face the greatest rise in inequality since records began, with the pandemic increasing economic inequality in almost every country at once.
It could take more than a decade for billions of the world’s poorest people to recover from the economic hit of the pandemic while the 1,000 richest people recouped their COVID-19 losses within just nine months.
Just 10 people – the world’s richest billionaires, all men – have seen their combined wealth skyrocket by half a trillion dollars since the pandemic began. That’s more than enough to pay for a COVID-19 vaccine for everyone and to prevent the pandemic from pushing anyone into poverty.
The World Bank estimates that the number of people living in extreme poverty – defined as $1.90 per day or less – increased by between $119 and $124 million in 2020 because of the pandemic. This is the first increase in extreme poverty in 20 years.
The World Food Programme estimates that the total number of acutely food-insecure people increased to 272 million in 2020, compared to 149 million people in 2019.
According to the United Nations, the pandemic could force almost a billion people into destitution by 2030 “unless nations introduce energy, food and climate reforms.”
The above data clearly indicate that the pandemic has “made the rich richer and the poor poorer.” Although there has been a long-term pattern of increasing concentration of wealth around the world, the level of extreme poverty had been dropping dramatically during the two decades prior to 2020. But the pandemic reversed the long-term trend in the decrease of extreme poverty.
This projection of widening inequality in the decade ahead is not a foregone conclusion. It can be addressed in two primary ways: by increasing taxes on the wealthy, and by implementing reforms to drive down the poverty rate.
Along with an increase in corporate taxes, President Biden is proposing more progressive taxes on individuals and families that would particularly focus on the very wealthy. Other developed countries have instituted such tax reforms, or are considering doing so.
“These measures include investments aimed at changing patterns of food, energy, and water consumption and increasing internet access as well as supporting low-carbon economies.
Rich nations also face calls to look beyond their own economic woes and support developing countries by increasing foreign aid, cancelling debt, and financing affordable vaccines.”
Both the trends of increasing economic power of large corporations and increasing inequality between the wealthy and the rest of us accelerated as a result of the pandemic in 2020 and the first half of 2021. In addition, the progress that had been made in reducing extreme poverty during the past 20 years suffered a significant reversal.
But, progressive policies during the next decade can reduce the power of large corporations and decrease the wealth gap between the rich and the poor.
The Cooperative Society Newsletter September 2019, Issue 18
by E.G. Nadeau
Far too often, people use the same words, but mean very different things. This can be confusing, even dangerous, especially in the world of politics. With the lead-up to the 2020 presidential and congressional elections in the United States, it is particularly timely to take a close look at some of the major “isms” being bandied about by politicians, journalists, and pundits.
What does “populism” mean? The word can apply to “a range of political stances that emphasize the idea of ‘the people’ and often juxtapose this group against ‘the elite’.” But, right off the bat, use of the P-word runs into big trouble. You can have right-wing populists, left-wing populists, and demagogues like Rodrigo Duterte in the Philippines and Nicolas Maduro in Venezuela who claim to be populist, but have questionable popular support.
So, ultimately, the word populism has become meaningless. To use it spreads confusion and disinformation rather than political understanding.
How about “socialism”? Socialism is another word that has become a lightning rod for mystification as we approach the 2020 elections. Although running as a Democrat for president, Bernie Sanders refers to himself as a socialist. Alexandra Ocasio-Cortez and Rashida Tlaib, both members of Democratic Socialists of America, were elected as Democrats to the House of Representatives in 2018.
So, what is socialism? The classic definition with origins dating back to Karl Marx and others in the mid-1800s is, “Economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”
But, these three self-proclaimed “socialists” sound much more like Northern European-style social democrats, who favor mixed economies that combine elements of both regulated private enterprise and a public sector that limits economic inequality and attempts to provide a minimal quality of life for all citizens.
To further complicate the meaning of socialism, President Trump and other Republicans accuse progressive Democrats of being out to destroy the US economy by nationalizing corporations and turning the US into an economic backwater like Cuba or Venezuela.
We would all be better served by dropping the word “socialism” from the rhetoric of the 2020 campaigns and focusing on the specific positions that candidates take related to healthcare, climate change, gun control, and other issues.
What does “capitalism” mean? A typical dictionary definition of capitalism is: “An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”
The problem with a definition like this is that it doesn’t reflect the reality of the contemporary world economy, in which government regulation, taxation and incentives, and international trade agreements (and trade wars) play major roles in shaping the market in which corporations operate.
Virtually every country in the world – including such outliers as North Korea and Cuba – has a mixed economy, which combines private enterprise and public involvement in the market.
For example, Forbes’ Global 2000, the world’s largest publicly traded corporations, includes the four largest Chinese banks in its Top Ten list. These banks are predominantly government-owned, but also have limited investor-ownership. The phrase “state capitalism” is often used to characterize the Chinese, Russian, Vietnamese, and other national economies in which the government has a major, direct involvement in the market.
The purpose of corporations is also being redefined by some of the largest publicly traded companies in the world. CNBC recently reported that the Business Roundtable, comprised of almost 200 CEOs of major U.S. corporations, stated that the foremost function of their companies should not be to “serve their shareholders and maximize profits.” Instead it should be “investing in employees, delivering value to customers, dealing ethically with suppliers, and supporting outside communities.”
Conclusion Thus, as with populism and socialism, capitalism is not a useful term to describe a national economy, or a political ideology. The reality is that in different countries and in the international arena, there is a wide range of ways in which private enterprises, public enterprise, mixed enterprises, and various forms of public intervention interact to shape economic activity. The word “capitalism” is useless in capturing this diversity.
Thus, as we consider candidates for public office and the track records of those who already are in office, it’s not the “isms” we should be looking at, but the specific actions they have taken or propose to take to improve our social, economic, political, and environmental well-being. For more on what The Cooperative Society Project perceives as major components of a better society, please click www.thecooperativesociety.org
The Cooperative Society Newsletter July 2019, Issue 17
by E.G. Nadeau
A friend and I visited China as tourists in April of this year. Our itinerary included the south-central part of the country, Hong Kong, Tibet, Beijing, and a hike on the Great Wall.
China is impressively modern in many ways – shiny new airports, attractive hotels and restaurants, a well-constructed road system, electric mopeds that have mostly replaced bikes in larger cities, and, at least in tourist sectors, well-kept-up streets, buildings, parks, and gardens.
A darker side of China But in Lhasa, the administrative capital of “the Autonomous Region of Tibet,” we saw another, darker side of the Celestial Empire that was the opposite of autonomous – a strong police and military presence, including occasional snipers positioned on rooftops; and many Han Chinese, the dominant ethnic group in the country, imported to dilute the percentage of Tibetans in their own region.
There continues to be controversy over the historical relationship between China and Tibet, the number of Tibetans who have died in the aftermath of China’s invasion of Tibet in 1950 (500,000 seems to be about right), the number of Han Chinese living in Tibet, the extent to which Tibetan Buddhists are allowed to practice their religion, and many other issues.
Although the large majority of Buddhist monasteries was destroyed in the 1950s and 1960s, those that we visited in Lhasa were beautiful and well-maintained. Buddhists appeared to be able to practice their religion freely. At the same time, however, we had the sense that the traditional culture of Tibet was gradually, but inexorably, being subsumed into a monolithic Chinese society.
Tibet is just one example of the Chinese government’s drive to homogenize the diverse cultures and beliefs of its citizens, crush dissent, and snuff out expressions of democratic values. The brutal crackdown on the Tiananmen Square protests in 1989, the current suppression of the religious and cultural identity of 11 million Muslim Uighurs in northwestern China, the ongoing attempts to restrict civil rights in Hong Kong, and the ever-present threat to the autonomy of Taiwan are all manifestations of authoritarian rule by China’s political leaders.
In many ways, Tiananmen Square marked a decisive turning point in recent Chinese history. As one author commented: “When China’s moment of reckoning came, Communist Party leaders chose bullets, not ballots. And they made a long-shot, long-term Faustian deal to guarantee economic development in exchange for continued party control that has lasted ever since.”
Another example of oppression The current plight of the Uighurs represents a doubling down on the repressive side of this “Faustian deal.” There are up to two million Uighur adults in detention centers. Many of their kids are required to attend state-run schools intended to mold them into compliant Chinese citizens while stripping away their religious beliefs, language, and culture. On top of this indoctrination, the Uighur homeland, the Xinjiang Autonomous Region (note again the irony of this province’s name), may be the most concentrated police state in the world, with sophisticated electronic surveillance, facial recognition profiling, apps inserted into phones to track potential dissidents, and, believe it or not, the required boarding of Han Chinese in many Uighur households.
But there is nothing immutable about the current paranoia of China’s leadership toward diversity and dissent.
There have been major shifts in China’s politics and economics since the beginning of Communist rule in 1949 – some disastrous, such as the Great Leap Forward in which an estimated 45 million people died (mostly of starvation) between 1959 and 1962, and the Cultural Revolution in which up to 2 million more people died between 1966 and 1976 – mostly as a result of violence by the Red Guard. On the positive side, Deng Xiaoping, Mao Zedong’s immediate successor as Chairman of the Communist Party, shifted away from a tightly controlled, state-run economy to a mix of state and private enterprises, beginning in 1976. This change brought rapid economic growth, which has mostly continued to the present day.
A democratic foothold Most people are unaware that there is a democratic side to Communist China. In 1987, the national government instituted a reform in which village leaders were to be elected by residents and others affiliated with each village. With a few interruptions along the way, this local-level democracy is still in effect. Thus, electoral democracy already has a foothold in almost all of China’s 900,000+ villages.
Just as there have been major changes in China over the past 70 years, it would be imprudent to dismiss the potential for future significant reforms, including ones toward less repression and greater democracy, in the next couple of decades.
The Cooperative Society Newsletter May 2019, Issue 15
by E.G. Nadeau
This paper provides a brief overview of recent and prospective changes in access to electricity in developing countries. These changes can contribute to the goal of worldwide electrification by 2030. One of these changes is the increasing development of community solar cooperatives that provide electricity through mini-grids, and installations on individual homes and other buildings. These co-ops are the primary focus of this paper.
There are almost a billion people who have no access to electricity, living primarily in Africa, Asia, and Latin America. That’s one-seventh of the world’s population. There are hundreds of millions more whose energy is unreliable, dirty, unhealthy, inadequate, unsustainable, and/or expensive – for example, kerosene, diesel, wood, and candles.
Almost every country in the world has made a commitment through the United Nations Paris Agreement to significantly cut back by 2030 on their use of energy sources that emit carbon dioxide into the atmosphere. (Note that the Trump administration is planning to withdraw the United States from the agreement in January 2020.)
These same countries have made commitments through the UN’s Sustainable Development Goals program to dramatically improve the quality of life around the world by 2030, in part by ensuring “access to affordable, reliable, sustainable and modern energy for all.”
There are many ways in which universal access to electricity will improve the quality of people’s lives – for example, creating job opportunities, reducing the workload of women by saving, on average, an hour a day that is currently spent searching for firewood, and preventing almost 2 million premature deaths per year from household air pollution. There would also be a net reduction in greenhouse-gas emissions because of lower use of biomass fuel for cooking, and the virtual elimination of kerosene and other dirty fuels as sources of heat and light.
How can the ambitious goal of “electricity for all” be realized? The broad answer is to dramatically increase the use of decentralized, renewable energy to meet the world’s unmet and under-met needs for electricity. Since most people without electricity do not have access to transmission lines, the most feasible approach to providing them with electricity is through community solar mini-grids and single building installations, many of which could be organized as cooperatives.
Recent and projected progress in electrification According to the World Energy Outlook reports of 2017 and 2018, there has been a pattern since 2000 of accelerating access to electricity for unserved and underserved populations. As alluded to above, almost 1 billion people were still without electricity in 2017, but that’s a marked improvement over the 1.7 billion without access in 2000. Unfortunately, during this time period the “vast majority (97%) of new electricity connections” was through primarily fossil-fuel-based grid extensions. Less than 1% of new electricity access was provided via decentralized, renewable energy systems.
On the bright side, the 2017 report goes on to say that between 2018 and 2030, fossil fuels will largely be replaced by renewable energy – especially solar energy – as the primary source for electricity. “The rapidly declining costs of solar PV [photovoltaics], battery technologies, and energy-efficient appliances (especially light-emitting diode [LED] lighting) are making decentralized renewable energy systems more affordable. This is particularly the case for rural and dispersed communities not served by a main grid and where it may take years for one to arrive. Decentralized systems can also be attractive in areas with grid access but an unreliable power supply.”
Despite the dramatic progress during the first part of the 21st-century, future “trends on energy access . . . fall short of global goals. The New Policies Scenario sees some gains in terms of access, with India to the fore. However, more than 700 million people, predominantly in rural settlements in Sub-Saharan Africa, are projected to remain without electricity in 2040, and only slow progress is [being] made in reducing reliance on the traditional use of solid biomass as a cooking fuel.”
Growth of solar and other renewable sources of electrification Back on the bright side, there are a number of exciting renewable-energy options that are becoming increasingly available to rapidly expand the electrification of the world. For example, large solar arrays are being developed across northern Africa that could eventually replace much of the remaining fossil-fuel energy of Europe. One analyst estimates that putting solar panels on 2% of the Sahara Desert could meet all of the world’s electricity needs. Building underwater transmission cables from the Northern Africa to Europe is quite feasible. The same is not true for transmission to the Americas. There are other examples of desert-based, large-scale solar projects in Saudi Arabia, China, the Navajo reservation in the United States, and elsewhere. Together, these systems are likely to provide a huge addition to affordable, renewable energy by 2030.
Wind turbines are cheaper than solar panels in many situations and will continue to be a critical part of any future mix of renewable-energy sources.
Because of the intermittent generation of electricity by solar and wind installations, they must be supplemented by other sources of energy, energy storage, and/or long-distance transmission. Lithium-ion batteries and other means of storage are an important and increasingly cost-effective way to expand the use of renewable energy at every level, from individual buildings to large power plants.
Community solar energy Many of the close-to-a-billion people who don’t have access to electricity live in fairly remote areas that are not easily connected to major power grids. As a result, large-scale renewable options don’t apply to them and are not likely to in the near future because of the high cost of transmission lines.
In these off-the-grid locations, households and businesses, and clusters of electrical consumers at the village level, can be most economically and efficiently served by electricity generated locally.
In projecting future expansion of access to electricity, the 2017 World Energy Outlook report lays out an “energy-for-all” scenario that is based on the goal of universal electrification by 2030.
Figuring in population growth, this scenario would mean expanding electrical coverage to more than 1 billion additional people at an approximate cost of almost $800 billion. The report concludes that over 50% of this electricity would be powered by solar energy, and less than 25% by fossil fuels. Furthermore, more than 60% of new electrical energy would be generated by mini-grid and off-grid systems. (“Off-grid” systems are defined as powering individual homes and other buildings.)
Below are five examples that include community solar components, followed by a discussion of how community solar co-ops could be expanded and made more efficient so that hundreds of millions more people around the world could benefit from renewable, reliable, and locally-controlled electricity.
Liberia The recently formed Totota Co-op in rural Liberia began operating a solar mini-grid in 2018. Under a contract from the US Agency For International Development, the National Rural Electric Cooperative Association (NRECA) and Bandera Electric Co-op, one of NRECA’s member cooperatives, assisted the village to organize the co-op and install solar panels, a battery-storage unit, and other equipment. NRECA is also working with 12 Liberian coastal villages to expand the community solar model to them.
Rural India When Narendra Modi became Prime Minister of India in 2014, 300 million households were without electricity. At the end of 2018, every village in India was reported to have electricity, but there were still 30 million households without it. President Modi promised to electrify all of these remaining households by April 2019 through a combination of hooking them up to the national grid and through mini-grid and off-grid installations. There are mixed reports on whether or not that goal has been attained. There are also concerns about the reliability of the national electricity grid, which has a tendency from time to time to leave subscribers in the dark.
Despite these reliability problems and differing assessments of how many households are now electrified, the almost-full electrification of India is a major accomplishment. It is also worth noting that many communities have formed Village Electric Committees to oversee the operation of their solar facilities. According to one observer, “most Indian solar microgrids are democratic, with power controlled by village committees.”
The Caribbean Twenty-seven island countries and other territories, along with private-sector partners formed the Caribbean Climate-Smart Accelerator in 2017 to create more self-sufficient and sustainable development, including an increased emphasis on renewable energy. “The central objective of the Accelerator is to help transform the region’s economy through fast-tracking sound public and private investment opportunities which support climate action and economic growth, through sustainable development.”
Islands, big and small, face special challenges in meeting their electrical service needs. Most don’t have local sources of energy, although some use wood, other kinds of biomass, hydroelectric, and geothermal energy. Importing fuel, such as diesel, is expensive and polluting. Many islands are also vulnerable to tropical storms and hurricanes which play havoc with transmission lines and other components of the electrical system. Consider the damage that Hurricane Maria caused in Puerto Rico in 2017, including the estimated loss of about 3,000 lives, and from which the island is still recovering.
Solar mini-grids and single-building solar installations, for example in hospitals, provide protection against catastrophic damage and loss of life in the event of national weather and other emergencies in island communities. Mini-grids can be designed as part of island-wide grid systems that can operate autonomously when the main grid goes down.
The Sahel Region of Africa Along the southern edge of the Sahara Desert is a huge savanna region called the Sahel. At over 1 million square miles, it is one-third the size of the Sahara. “The Desert to Power Program . . . seeks to make use of this massive swathe of territory to develop 10,000 megawatts (MW) worth of solar energy to provide electricity to 250 million people – including . . . 90 million people off-grid.”
Kenya Kenya has a much higher distribution of electricity than most Sub-Saharan African countries. Approximately 75% of Kenyans have access to electricity from grid and off-grid sources, according to the World Bank.  The Kenyan government wants to increase that to 100% by 2022. The Kenya National Electrification Strategy (KNES) references mini-grids, independent solar power plants, and off-grid technology as options to utilize. About 49 million people live in Kenya, and most of them are in rural areas. 
One of the options being pursued is a private sector partnership between Azuri, Unilever, and local community residents. In this program, households and businesses purchase solar kits via a rent-to-buy system. Purchasers make monthly payments for 18 months, and then they own the kits outright. The kits come in various sizes, from a single light set-up, to one that can power multiple lights and other appliances, including a television. Another feature of the distribution system is that local community residents are trained to sell, install, and maintain the kits. Thus, there is a direct, local employment impact, as well as the indirect economic, social, health, and educational benefits resulting from increased access to energy.
This Azuri/Unilever model has excellent potential to be adapted for the development of community solar projects in other developing countries.
An example of a solar home lighting system available in Kenya.
Advantages of, and challenges to, community solar co-ops Listed below are the advantages of, and challenges to, community solar co-ops as means to rapidly expand electrical services in developing countries.
They are relatively inexpensive to install and operate.
They can be rapidly ramped up
As mini-grids and clusters of single building installations, they can operate independent of large-scale transmission grids
Panels and other components are easy to transport, install, and maintain.
Consumer costs can be based on usage.
Decisions are made by locally elected boards.
They generate jobs and new business activity.
They improve the quality of everyday life and health.
There is a shortage of champions for solar community cooperatives in the international community.
Even though they can operate self-sufficiently once formed, there are difficulties in accessing start-up capital for them.
There is often a lack of local expertise for sourcing materials, setting up local systems, and providing ongoing monitoring and support services.
However, none of these challenges are insurmountable.
Despite the success of community solar co-ops in some developing countries, there is not nearly enough support for expanding this approach to help meet the goal of universal access to electricity by 2030. Three of the co-op entities in the best position to promote and assist community solar co-op projects are the International Co-operative Alliance, the US-based National Rural Electric Cooperative Association, and the World Organization of Credit Unions (WOCCU). The former two organizations are clearly supportive of the approach, but neither appears to be taking a strong leadership role in promoting it. WOCCU could also be an important advocate for community solar co-ops by encouraging and assisting credit unions, savings and credit cooperative organizations, and other financial cooperatives around the world to provide financing for these co-ops.
Other potential champions and sources of financing include the World Bank, the United Nations Development Program, and various bilateral development programs such as the United States Agency for International Development, the Swedish International Development Agency, the UK’s Department for International Development, the Canadian International Development Program, and major foundations, and business partners. Despite the fact that many of these organizations are already providing assistance to electrification in developing countries, none are actively championing the expansion of the community co-op model.
As both India and Kenya are demonstrating, national initiatives to provide universal electrification within countries appear to be a very effective strategy for expanded coverage. This is clearly a way to mobilize action for universal electrification, including the development of community solar co-ops. And, yet, there are not enough of these national models. The proliferation of these models would benefit greatly from support by the international organizations mentioned above.
For a historical perspective, it is useful to look at the rural electric cooperative movement in the United States. In addition to the strong demand for electricity by rural residents, the second biggest factor setting the stage for the rapid growth of these co-ops in the 1930s and 1940s was the provision of low-interest loans by the Rural Electrification Administration (REA) established by the Roosevelt administration in the mid-1930s. Today, about 1,000 rural electric co-ops provide electricity to 40 million people in rural and suburban communities throughout the United States. Similar loan programs, both national and international, could be established during the next decade to accelerate electrification in developing countries.
Conclusions There are two key conclusions of this paper. Community solar cooperatives are already in place in some developing countries and could be expanded rapidly to provide electricity in many more. However, unless the expansion of these co-ops becomes a much higher priority of the international cooperative community and of international development organizations, the huge potential for these local, democratically run, renewable energy providers will not be realized.
The Cooperative Society Newsletter January 2019, Issue 13 by E.G. Nadeau, Ph.D.
We’ve written two books about the societal transformation that we believe is taking place. Our hypotheses are based on our research of seven broad sets of variables such as economic power, the environment, quality of life, and more. If this is of interest to you – and it quite possibly is because you’re here at our website – we invite you to download a free PDF of our book, The Cooperative Society: The Next Stage of Human History, Second Edition, or find information on buying the book here. Thank you.
What is a Green New Deal? There has been a lot of buzz recently about launching a Green New Deal in the United States, with Alexandria Ocasio-Cortez (often referred to as AOC), the new congresswoman from New York, playing a lead role in championing this initiative.
However, questions abound. What is a Green New Deal? Can this catchy title be turned into a pragmatic set of new policies? Can there be a global counterpart to this progressive American idea?
What a Green New Deal is depends on whom you ask. In a comprehensive article that appeared in early January in Vox magazine, David Roberts defined it this way:
“It refers, in the loosest sense, to a massive program of investments in clean-energy jobs and infrastructure, meant to transform not just the energy sector, but the entire economy. It is meant both to decarbonize the economy and to make it fairer and more just.”
To elaborate, Roberts’ definition would combine a variety of initiatives to reduce global warming, decrease poverty, create jobs, and effectively implement a green paradigm for the American economy. This new economic model would prioritize human and environmental needs, reduce the economic influence of large corporations, and reduce economic inequality.
Some question the overarching and complicated nature of such a transformation in American energy and economic policy. Some see it as a threat to fossil-fuel-based corporations, and to an entire society that has been dependent on fossil fuels almost since capitalism began. Others worry about the difficulty of implementing such a wide array of changes at the same time. By taking on too much at once, they fear that we may end up with nothing or very little. Effective climate action could get lost in the shuffle.
The same kinds of comments can be made about an international version of a Green New Deal. Some observers laud such a possibility, while others worry about losing a worldwide consensus (we’ve already lost the Trump administration) on the urgent need for climate reform by the addition of too much additional baggage.
When was it first proposed? The “New Deal” part of the phrase originated with the presidency of Franklin Roosevelt, whose administration used this catchphrase to encompass an array of programs intended to pull the United States out of the Great Depression of the 1930s. It was not one massive reform, but a series of separate programs and regulations that together constituted major changes in the federal government’s role in creating jobs and increasing economic and social security.
The New York Times columnist and author, Thomas Friedman, is credited with first using the phrase “Green New Deal” in 2007. In early January 2019, Friedman wrote another op-ed, “The Green New Deal Rises Again,” in which he expressed support for the renewed sense of urgency in addressing climate-change problems.
Presidential candidate Barack Obama included the phrase Green New Deal in his platform in 2008.  And in 2009, the United Nations produced a report entitled “Global Green New Deal.” But then, domestic and international concerns shifted to addressing problems created by the Great Recession, and the momentum for a comprehensive approach to climate change temporarily hit the skids.
The phrase Green New Deal reemerged during the 2018 midterm election campaigns of several progressive, Democratic candidates for Congress. This time around, the concept has received a lot of attention – both positive and negative – in the press and among politicians and environmental and social activists. It is too soon to tell whether or not the momentum toward implementing some version of a Green New Deal – at the national and international levels – will stick this time or fade into the background again.
A survey conducted by the Yale Program on Climate Change Communication in mid-December shows “overwhelming support for the Green New Deal, with 81% of registered voters saying they either ‘strongly support’ (40%) or ‘somewhat support’ (41%) this plan.”
What might a pragmatic version of this idea look like in the United States? The young progressives in Congress who are championing a Green New Deal for the United States (and for the world) are already being “put in their place” by their congressional elders. For example, AOC and her fellow insurgent colleagues have already lost the fight to have a special committee established to focus on preparing the way for the implementation of Green New Deal legislation.
But that doesn’t mean they have lost the war. They and other advocates are already gearing up for the 2020 presidential and congressional elections. They plan to keep pushing their message for the urgent need to link climate change and positive economic change in order to simultaneously reduce the risk of catastrophic global warming and create an economy that provides well-paying jobs and economic security.
I have one piece of advice for these Green New Deal advocates: Just as the Roosevelt administration did so successfully with the New Deal, think in terms of a set of reforms rather than one massive program. These reforms could include increased federal and state incentives for conversion to solar, wind, and other renewable sources of energy, for electric vehicles, and for energy-efficient buildings. They also could include job training and job creation for a green economy; increased taxes on the wealthy and/or taxes on carbon-dioxide emissions; and economic benefits for the poor tied to climate change, renewable energy, and energy efficiency.
As a global initiative? The reemergent Global Green New Deal has not yet been articulated in any detail, although it is considered by proponents to be an extension of the reform program being articulated for the United States.
What would the global version entail? The United Nations has already established a Green Climate Fund, the primary purpose of which is to assist poorer countries to implement carbon-reducing initiatives, and to adapt to the problems created by global warming – for example, protection against rising sea levels and agricultural practices that are more resilient to droughts and floods.
A key problem is, however, that there is not nearly enough money in this Fund to address the magnitude of the problems. It is not clear at this time how the size of the Fund could be rapidly and massively expanded.
There are also other bilateral, multilateral, and private-sector aid and economic assistance programs to accelerate climate reforms in developing countries. But, again, they do not match the urgency of the problem.
From my own research and my review of the literature, I am aware of a number of initiatives that could provide tens of millions of jobs in developing countries in the fight against global warming. They include forest-based carbon sequestration; installation of solar-panel microgrids; the rapid deployment of low-cost, electric vehicles; accelerated increases in the energy efficiency of buildings; and financial assistance in weaning countries off of dependency on fossil fuels and transitioning to renewable energy.
Conclusion The most recent studies are projecting that we have a little over 10 years to radically reduce greenhouse-gas emissions before the world will be subjected to major increases in climate-related disasters. The proponents of domestic and international Green New Deals recognize the sense of urgency with which we need to mobilize our resources to counter this worldwide threat.
My primary caution is to follow the same type of multi-pronged strategy of the original “New Deal.” Let’s not try to do everything at once in one massive package. We can simultaneously benefit the planet and the economic circumstances of the people who inhabit it by introducing a broad set of reforms that vary by community and by country, rather than by striving for a holy grail, mega-reform that is likely to get snarled in its own complexity.
The Cooperative Society Newsletter September 2018, Issue 11 by E.G. Nadeau, Ph.D.
A little over a billion people have no access to electricity. That’s 1/7th of the world’s population. There are hundreds of millions more whose energy is unreliable, dirty, unhealthy, inadequate, unsustainable, and/or expensive – for example, kerosene, diesel, wood, and candles.
At the same time, almost every country in the world has made a commitment through the United Nations Paris Agreement to significantly cut back by 2030 on their use of energy sources that emit carbon dioxide into the atmosphere. (Note that the Trump administration is planning to withdraw the United States from the agreement in January 2020.)
On top of all that, these same countries have made commitments through the UN’s Sustainable Development Program to dramatically improve the quality of life around the world by 2030. One of the Program’s goals is to, “Ensure access to affordable, reliable, sustainable and modern energy for all.”
There are many ways in which universal access to electricity will improve the quality of people’s lives; for example, creating job opportunities, reducing the workload of women by saving on average an hour a day that is currently spent searching for firewood, and preventing almost 2-million premature deaths per year from household air pollution. There would also be a net reduction in greenhouse-gas emissions because of lower use of biomass fuel for cooking, and the virtual elimination of kerosene and other dirty fuels as sources of heat and light.
How can these divergent problems and goals be reconciled?
The broad answer is to dramatically increase the use of renewable energy to meet the world’s unmet and under-met needs for electricity. This article provides a brief overview of recent changes in electrical access and outlines a path toward universal electrification by 2030 with a focus on community-based solar energy.
Recent and projected progress in electrification There has been a pattern since 2000 of accelerating access to electricity for unserved and underserved populations. Data from the World Energy Outlook 2017 Special Report indicate that in 2000, there were about 1.7 billion people without access to electricity. This number dropped to 1.1 billion in 2016. The “vast majority (97%) of new electricity connections” has been provided through primarily fossil-fuel-based grid extensions. Less than 1% of new electricity access has been via decentralized systems.
The report goes on to say that between now and 2030, fossil fuels will largely be replaced by renewable energy – especially solar energy – as the primary source for new electricity connections. “The rapidly declining costs of solar PV [photovoltaics], battery technologies, and energy-efficient appliances (especially light-emitting diode [LED] lighting) are making decentralized renewable energy systems more affordable. This is particularly the case for rural and dispersed communities not served by a main grid and where it may take years for one to arrive. Decentralized systems can also be attractive in areas with grid access but an unreliable power supply.”
Growth of solar and other renewable sources of electrification There are a number of exciting, renewable-energy options that are beginning to electrify the world. For example, large solar arrays are being developed across northern Africa that could eventually replace much of the fossil-fuel energy of Europe. One analyst estimates that putting solar panels on 2% of the Sahara Desert could meet all of the world’s electricity needs.
Building underwater transmission cables from the Sahara to Europe is quite feasible. The same is not true for transmission to the Americas. There are other examples of desert-based large-scale solar projects in Saudi Arabia, China, the Navajo reservation in the United States, and elsewhere. Together, these systems are likely to provide a huge addition to affordable, renewable energy by 2030.
And, we can’t forget about wind. Wind turbines are still cheaper than solar panels in many situations and will continue to be a critical part of any future mix of renewable-energy sources.
Both solar and wind must be supplemented by other sources of energy and energy storage systems. Lithium ion batteries and other means of storage are an important and increasingly cost-effective way to expand the use of renewable energy at every level, from individual buildings to large power plants.
Community-based solar energy Many of the billion-plus people who don’t have access to electricity live in fairly remote areas that are not easily connected to major power grids. As a result, large-scale renewable options don’t apply to them and are not likely to in the near future because of the high cost of transmission lines.
Households and businesses, and clusters of electrical consumers at the village level, can be most economically and efficiently served by electricity generated right at the community level.
In projecting future expansion of access to electricity, the World Energy Outlook Report lays out an “energy-for-all” scenario, which is based on the goal of universal electrification by 2030.
Figuring in population growth, this would mean expanding electrical coverage to 1.3 billion additional people at an approximate cost of almost $800 billion. The report concludes that over 50% of this electricity would be powered by solar energy, and less than 25% by fossil fuels. Furthermore, more than 60% of new electrical energy will be generated by mini-grid and off-grid systems. (For the most part, “off-grid” systems power individual homes and other buildings.)
Below are four examples that include community-based solar components, followed by a discussion of how community solar could be expanded and made more efficient so that many millions more people around the world could benefit from renewable, reliable, and locally controlled electricity.
Liberia The newly formed Totota Co-op in rural Liberia has just begun operating a community solar co-op. The National Rural Electric Cooperative Association (NRECA) and Bandera Electric Co-op, one of NRECA’s member cooperatives in the United States, assisted the village to organize the co-op and install solar panels, a battery-storage unit, and other equipment. NRECA is working with 12 Liberian coastal villages to expand the community solar model to them.
Rural India When Narendra Modi became Prime Minister of India in 2014, 300 million households were without electricity. Every village in India now has electricity, but there are still 30 million households without it. President Modi promises to electrify all of these remaining households by April 2019 through a combination of hooking them up to the national grid and through mini-grid and off-grid installations. Many communities have formed Village Electric Committees to oversee the operation of their solar facilities. According to one observer, “most Indian solar microgrids are democratic, with power controlled by village committees.”
The Caribbean Islands, big and small, face special challenges in meeting their electrical service needs. Most don’t have local sources of energy, although some use wood, other kinds of biomass, hydroelectric, and geothermal energy. Importing fuel, such as diesel, is expensive and polluting. Many islands are also vulnerable to tropical storms and hurricanes that play havoc with transmission lines and other components of the electrical system. Consider the damage that Hurricane Maria caused in Puerto Rico last year, including the estimated loss of about 3,000 lives, and from which the island is still recovering.
Forty island countries and other territories in the Caribbean formed the $1-billion Caribbean Climate-Smart Accelerator in August 2018 to create more self-sufficient and resilient energy systems.
The Sahel Region of Africa Along the southern edge of the Sahara Desert is a huge savanna region called the Sahel. At over 1,000,000 mi.², it is one-third the size of the Sahara.
“The Desert to Power Program . . . seeks to make use of this massive swathe of territory to develop 10,000 megawatts (MW) worth of solar energy to provide electricity to 250 million people — including for 90 million off-grid.”
Here are some strengths of the community-based solar model:
Can have its own microgrid, independent of a large-scale transmission grid
Easy to transport, install, and maintain
Costs can be based on usage
Decision-making can be through cooperative or other locally elected boards
Can generate jobs and new business activity
Can improve the quality of everyday life and health
And here are some of the challenges to expanding the model so that it reaches as many communities as possible:
Expertise to source materials and set up local systems
Ongoing monitoring and support
There are a number of international and national programs, both public and private, that are expanding their involvement in the creation of community solar programs. There is still a long way to go to provide renewable energy to the billion-plus people who have little or no access to it now. However, based on the analysis of the World Energy Outlook Report, “energy for all” by 2030 is an achievable goal.
The Cooperative Society Newsletter
January 2018, Issue 7
The underlying theme of the first Cooperative Society newsletter article of 2018 is that private-sector organizations can do good and do well at the same time. Companies in the Forbes Global 2000 can create social and environmental benefits as well as provide financial returns to their investors. Small businesses can play a positive role in their local communities and thrive economically. And social enterprises – businesses that put service before profit – have become far more numerous and visible in the past three decades.
A growing number of cooperatives and mutual insurance companies as well as non-profit and for-profit businesses meet the definition of social enterprises. Foundations, that are not engaged directly in business activities, can also have huge positive impacts.
For the purposes of this article, let’s call these varied private-sector approaches to doing good “the social economy.”
Why is the rapid increase in the social and environmental commitments of these organizations during the past two or three decades such a big deal? Because they can be a means for improving the quality of life for billions of people around the world and for addressing a wide variety of community and environmental problems. Rather than analyze the broad socio-economic movement, the purpose of this brief essay is to provide an introduction to the fastest-growing part of this phenomenon – social enterprises – and to their contribution to the development of a more cooperative society. The article also raises some concerns about this expanding business form, and makes a few recommendations for improvements.
Let’s start with a few examples.
Goodwill Industries International Goodwill, a nonprofit organization operating in the United States and Canada, is an example of a social enterprise that has been around for 115 years. It receives free donations of used clothing, furniture and other items, refurbishes them, and sells them through retail and wholesale outlets (and, more recently, online). The company also employs and trains people who have had difficulties in finding regular employment due to disabilities, a lack of skills and other factors. For many, the organization serves as a steppingstone into or back into the workforce.
Goodwill was founded in 1902 in Boston, Massachusetts, with the mission of “enhancing the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.” In 2016, Goodwill had more than 3,200 retail stores, generated $5.7 billion in revenue and assisted more than 300,000 people to find jobs. Goodwill has come under criticism in recent years, in particular for overpaying its top executives and underpaying some of its rank-and-file employees.
Italian social cooperatives The earliest social co-ops in Italy were formed in the late 1970s. In 1991, the Italian government established an official status for these cooperatives, divided into two main categories: “Co-ops that carry out activities in the area of health, social or educational services; and co-ops that act as agencies for integrating disadvantaged people in the labor market.”
In 2017, there were an estimated 60,000 cooperatives in these two categories. In many communities, these co-ops are an important part of the service network. For example, the city of Bologna contracts for about 85% of its social services through these co-ops, including childcare, eldercare and a wide range of other services.
Social enterprises in other European countries Since the official recognition of the Italian social cooperatives, six other European countries – Belgium, France, Ireland, Poland, Slovakia and Spain – have established statutes for social enterprises. There are approximately 230,000 social enterprises in these six countries with an estimated 1.5 million employees.
Microfinance institutions around the world Access to small-scale loans, savings accounts and insurance programs for low- income people has increased dramatically since Mohammad Yunus formed the Grameen Bank in Bangladesh in 1983. According to Convergence, an international organization that researches and facilitates microfinance institutions, “Global figures testify to significant levels of development, with a portfolio of USD87 billion and 111 million clients in 2014, and an estimated growth of 10% in outstanding portfolio and 15.8% in borrowers in 2015.”
It is important to keep in mind a couple of things about microfinance institutions. Not all meet the definition of social enterprises – putting social services before profit. Some have come under criticism during the past decade for charging exorbitant rates, for corrupt or greedy practices by lenders, and for ineffectiveness at assisting people out of poverty. If well organized and managed, however, they have proven to be a very useful means to provide loans, savings accounts and insurance for the poor.
co2online co2online is a German nonprofit enterprise that assists private households to decrease their consumption of energy and to lower their CO2 emissions. Their service provides a double win – for the environment and for consumers who lower their energy costs. There are not yet many social enterprises addressing environmental goals, but their potential for solving problems related to climate change and other environmental issues is significant.
The five examples of social enterprises, cited above, have greatly expanded a business model that puts social, community and environmental services above profits.
Growing pains Despite the rapid growth of social enterprises in the past couple of decades, we are still at an early stage in the development of this business model. For example:
There is not yet one agreed-upon definition of “social enterprise.”
There has been very limited analysis of the effectiveness of various approaches within the model.
There is no consistent certification system identifying which enterprises are truly putting social and environmental services before profits, and how effectively they are doing so.
Three of the most important steps in furthering this model will be: to define what is, and what is not, a social enterprise; to establish clear, consistent legislation for social enterprises in developing and developed countries; and to create transparent means to measure and report on their performance in achieving social, community and environmental objectives.
Despite these growing pains and the need for greater consistency and accountability, there is a tremendous upside for the growth and diversification of social enterprises.
 For further reading on this topic, see, for example: European Commission, Directorate-General for Employment, Social Affairs and Inclusion (2016): Social Enterprises and their Eco-systems: Developments in Europe. Authors: Carlo Borzaga and Giulia Galera.
The Cooperative Society Newsletter September 2017, Issue 5 by E.G. Nadeau
Did you know that the United States has one of the highest educational costs per student of all of the countries in the world? Despite these big expenditures, American kids score badly on literacy, numeracy, and problem solving compared to most other developed countries.
This is just one of many examples in which US tax dollars aren’t getting a good return on their investment. Despite what appears to be a progressive taxation system in the United States, the overall low level of taxes, numerous tax loopholes, and low expenditures on social and infrastructure programs reward the rich and punish the poor and middle-class. What would a good system look like in which an adequate amount of taxes was collected in a fair manner, and the revenue was used to provide a set of goods and services that meets the needs of the country’s residents?
Most developed countries in the world are doing a much better job than the US on cost-effectively addressing their economic, social, and environmental responsibilities. All of us – in rich, middle-income, and poor countries – can learn from these successes.
Unfair taxation and ineffective expenditures
After a dismal failure during the summer to repeal and replace Obamacare, the next big target for Trump and Republicans in the House and Senate is the restructuring of the federal tax system. This has all the earmarks of another thunderous, drawn-out flop. What would be even worse, however, is if this triumvirate of discord actually passed and approved a tax-reform bill.
Given the draft bills and talking points under consideration, the likely outcome of such a bill would be a massive transfer of wealth to the already-wealthy and to corporations, a minor financial sop to the middle class, an undercutting of basic services to the poor, the sick, and the elderly, and a substantial increase in the federal debt to pay for the giveaways.
Taxes are the major source of most governments’ revenues. As with any ledger, we need to look at revenues, expenditures, and the bottom line to evaluate a national budget. What are the sources of revenue? What are citizens getting for their tax money? A review of past US budgets shows that elected officials have been doing a bad job on both the revenue generation and the expenditure sides of the ledger.
This is not a new problem. It goes back decades to both Democratic and Republican administrations. We can’t blame the current president and Republican majority in Congress yet for these bad, historical fiscal results. As we mentioned above, however, if they get their way in the next few months, it will make future results even worse.
A look at revenue generation Let’s look at the revenue side first. As others have pointed out, the United States has a relatively progressive income tax, and a relatively high corporate tax. But both kinds of taxes need closer examination. The OECD (Organization for Economic Cooperation and Development) comprises 32 of the wealthiest, democratically-oriented countries in the world. Recent data show that the US does have the most progressive income tax structure of all OECD countries. The data also show that the US has the top corporate tax rate (39%, if one includes the average state corporate tax) among OECD members.
But there are problems with these superficial comparisons. Out of 31 OECD countries in 2014, the US collected the least amount of tax revenue as a percentage of GDP. It also spent one of the lowest per-household amounts on “cash transfers,” such as Social Security, unemployment compensation, and a variety of programs for the poor. The net effect of this taxation and expenditure system has been that the US has the fourth-highest level of income inequality of OECD members after taking into account taxes and cash payments.
In other words, the US tax system may be progressive, but it doesn’t collect much revenue relative to other developed countries and it spends relatively little on programs that benefit its citizens. So, high-income and wealthy people continue to be disproportionately enriched relative to others in American society, despite a nominally progressive tax system.
In terms of corporate taxes, statutory rates are one thing, and actual rates paid after tax breaks and loopholes are another. According to recent Treasury Department data, American corporations pay 28% in US and foreign taxes compared to 29% for corporations based in other G-7 countries. In other words, the effective tax rate is virtually the same for US corporations and those based in the world’s other largest countries. So, the “unlevel playing field” claimed by proponents of reducing the US corporate tax rate is a spurious argument.
A comparison of budget effectiveness in the US and other countries There are even more problems on the expenditure side. What kind of a return are Americans getting from their taxes? Not much, when compared to other OECD countries. For example:
The United States spends more on its military than the combined expenditures of the eight countries with the next-largest military budgets. Many, on both the right and left, have argued that the US could continue to have an effective military presence in the world with a far lower defense budget.
The US has by far the largest prison population and the largest proportion of its residents in prison of all of the countries in the world. So, “the land of the free” is the least free in the world when it comes to locking people up. It is worth noting that imprisonment is a far more expensive way to deal with nonviolent offenders than community-based treatment – both while offenders are under the supervision of the criminal justice system, and in terms of their future likelihood of running afoul of the law.
As alluded to in the introductory paragraph, the US spends more per capita on education than almost every other country in the world, but gets relatively poor results compared to most other developed countries – 19th out of 22 countries on literacy skills; 20th out of 22 countries on numeracy skills; and 18th out of 19 countries on problem-solving skills.
The US also spends more money per capita on healthcare than any other country in the world, again with relatively poor results in terms of longevity, maternal mortality, childhood mortality, insurance coverage, and many other measures. If the Republican repeal and replacement of Obamacare were to go into effect, things would get even worse as an estimated 22 million more people would be without health insurance.
The list of poor returns on US tax investments goes on and on: environmental programs, including reduction of carbon emissions, lagging maintenance and upgrading of its infrastructure (roads, bridges, airports, etc.), and social safety-net programs, including Social Security and a variety of programs for the poor.
Can the US improve its tax-and-spend performance vis-à-vis other countries? For the most part, there are not many surprises in the list of countries that do best on the above indicators. Nordic countries tend to be near the top of the class in many categories, followed by other northern European countries. Japan and Korea generally score well also. Estonia and the Czech Republic do well on educational performance measures, and Canada has one-seventh the rate of imprisonment as the United States. There are literally hundreds of lessons that can be derived from the ability of some countries to perform better and more cost-effectively on a variety of measures of returns on tax investments than the United States.
Trump and the Republican Congress are intent on making the US perform even more poorly on a range of economic, social, and environmental indicators as they “simplify” the income and corporate tax system and the budget this fall. “Simplify” is a code word meaning, “Reduce taxes on the wealthy, and reduce benefits derived from tax revenue, especially benefits for the poor.”
It is interesting to note that there is another version of a tax- and budgetary-reform bill floating around Washington. It’s a tax-reform proposal prepared by Bernie Sanders in 2016 when he was competing for the Democratic nomination for president. The Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute, did a detailed, independent analysis of this proposal. Such a reform bill, if passed, would do a great deal to move the United States from near the bottom of OECD countries to near the top on a variety of social, economic, and environmental measures.
It is highly unlikely that such progressive budget reforms will be enacted in 2017 or the following three years. But, keeping in mind that major changes don’t take place overnight, why not in 2021?