Tuesday, October 27, 2009

Retirement USA

Last week, the Building Movement Project signed on as a supporter of Retirement USA, a national initiative that is working for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. Convened by five organizations - the AFL-CIO, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, the Pension Rights Center, and the Service Employees International Union - the initiative has developed 12 Principles for a New Retirement System which provide a framework for a future system in which employers, workers, and the government would share responsibility for the retirement security for all American workers.

We'd like to share them here as an example of a commons-based approach to retirement, and encourage you to find out more and support the initiative:

Principles for a New Retirement System

Universal Coverage. Every worker should be covered by a retirement plan. A new retirement system that supplements Social Security should include all workers unless they are in plans that provide equally secure and adequate benefits.

Secure Retirement. Retirement shouldn’t be a gamble. Workers should be able to count on a steady lifetime stream of retirement income to supplement Social Security.

Adequate Income. Everyone should be able to have an adequate retirement income after a lifetime of work. The average worker should have sufficient income, together with Social Security, to maintain a reasonable standard of living in retirement.

***

Shared Responsibility. Retirement should be the shared responsibility of employers, employees and the government.

Required Contributions. Employers and employees should be required to contribute a specified percentage of pay, and the government should subsidize the contributions of lower-income workers.

Pooled Assets. Contributions to the system should be pooled and professionally managed to minimize costs and financial risks.

Payouts Only at Retirement. No withdrawals or loans should be permitted before retirement, except for permanent disability.

Lifetime Payouts. Benefits should be paid out over the lifetime of retirees and any surviving spouses, domestic partners, and former spouses.

Portable Benefits. Benefits should be portable when workers change jobs.

Voluntary Savings. Additional voluntary contributions should be permitted, with reasonable limits for tax-favored contributions.

Efficient and Transparent Administration. The system should be administered by a governmental agency or by private, non-profit institutions that are efficient, transparent, and governed by boards of trustees that include employer, employee, and retiree representatives.

Effective Oversight. Oversight of the new system should be by a single government regulator dedicated solely to promoting retirement security.

Tuesday, October 20, 2009

The Role of Government and Nonprofits in Culture

People who work for nonprofits in the United States often operate from a frame of scarce resources. The starting point is “There isn’t enough money to go around.” Now to be sure, this frame is not created from nothing—this is the lived experience for a lot of nonprofits. But the problem is when you start with “not enough” then you immediately have to go to arguing why one kind of nonprofit is more important than another. The questions become absurd very quickly: are hungry children more important than the symphony? Are homeless adults more important than homeless cats? Are homeless children more important than hungry adults? Recently a right wing organization in California, arguing that water ought not to be regulated, declared that California’s legislators cared more about “a fish that is smaller than the palm of your hand” than the well being of farmers. But in fact, the well being of this fish is an indicator of the health of the water and polluted water will not grow good crops.

But what happens in a country where that type of juxtaposition is not in play? According to the Christian Science Monitor, (Sept. 27, 2009), German doctors are experimenting with a new kind of preventive medicine: prescribing culture for children. (Of course, Germany has universal health care.) For example, in North Rhine-Westphalia, every child ages 7-15 who goes in for a check-up comes out with two free tickets to the theater. The program is called “Culture Shot” and encourages pediatricians “to support children’s 'physical, emotional, and intellectual health,'" says Hermann-Josef Kahl, who is spearheading the program. The program rests on a simple, (but not terribly American) insight: Culture fosters better health habits. Exposure to culture helps people want to be better educated and better educated people generally have a healthier life. (Germany has universal education also.)

So far this program is being paid for privately by the Association of Pediatricians. There are 180 Children and Youth Theaters in Germany, so there are plenty of shows for kids to go to. (Germany has a lot of government support for the arts). Stefan Fischer, head of the Dusseldorf Children and Youth Theater, calls the concept “revolutionary.” He says, “The project makes clear that culture is a basic nutrient and not a luxury.”

Instead of scarce resources, imagine nonprofits having a common belief that everyone should experience theater regardless of family or social background. And imagine a nonprofit sector that insisted that government do its job to make health care, education and culture were universally available. This imagining exercise is not just to pass the time: remember that Einstein said, “Imagination is more important than knowledge.”

Thursday, October 15, 2009

Round-up & Analysis on Prof. Ostrom's Nobel Prize

By now, everyone interested in the commons has probably heard of Professor Elinor Ostrom, the first woman to win the Nobel Prize in Economics.

It seems that the Nobel Committee’s decision to award the prize to Prof. Ostrom came as a shock to economists. Apparently the odds of her winning the prize were 50-against to 1; she was all the way at the bottom of a list of roughly 30 potential candidates. She was such a sleeper candidate at least in part because she’s a political scientist not an economist, as Steven Levitt pointed out in his Freakonomics blog. But it was also the focus of her work that kept her off the radar of traditional economists; a number of economist-bloggers confessed to having to look Prof. Ostrom up on wikipedia to even figure out what she works on. I shouldn’t be too hard on the economists though … I didn’t know who Prof. Ostrom was either, but am so glad that the Nobel Committee introduced her to us.

The Royal Swedish Academy wrote that Ostrom has “challenged the conventional wisdom that common property is poorly managed and should be completely privatized or regulated by central authorities.” Apparently this is a radical critique of economic orthodoxy. See, there’s this economic theory called “the tragedy of the commons” that supposes that when faced with a commonly held resource, the greed of rational actors will compel them to use up that resource. For instance, farmers with access to local grazing land have an incentive to let their cattle feed as much as possible, but if every farmer takes this maximum-feeding course there won’t be any grass left and everyone’s cattle will suffer. The traditional opposing options for dealing with this “tragedy” are either “let the best farmer win” (thereby depleting the grass) or regulate the behavior of the farmers. Obviously these extremes of unfettered consumption or rationing are straw men for either side of these debates over limited shared resources, and Prof. Ostrom’s work explains how a middle-ground of maintaining the commons actually works.

At the same time, her work straddles the “divide between libertarian and left politics in very interesting ways that challenge some of the underlying assumptions of both” – and also mean that people unfamiliar with her work (like myself) are reading into her theory what they want. For instance, a blogger for the Harvard Business School (who confessed to having to look Ostrom up) interprets Ostrom’s work as positing that “just because a market is declared to have failed, we don’t have to default reflexively to government regulation as the only solution.” That seems like a conveniently anti-government view, but I’m sure that activist-types (like myself) over-emphasize her focus on bottom-up and locally-based processes for ensuring the sustainability of our water, forests and other shared resources.

In addition to WHAT Prof. Ostrom has studied, her process is also apparently a radical departure from traditional economics. Instead of relying on the complex theoretical and statistical models that did nothing to forecast or prevent this current recession, Prof. Ostrom developed her theory based on observation of how the commons has been preserved around the world. It’s ironic that Ostrom’s fieldwork would be a radical departure for economics since the whole “tragedy of the commons” theory was actually developed by a biologist. Still the fact that Ostrom has distinguished herself by developing theory based on what is (or is not) working in the field reflects the work and orientation of the Building Movement Project (home of this website and work on the commons).

As advocates for commons-based thinking, I’m sure that we are going to be reading a lot of Prof. Ostrom’s body of work in the common months (at least those of us who hadn’t already); but we should also take another lesson from her and document our own examples of the commons at work.

Tuesday, October 13, 2009

Nobel prizes for the commons

The New York Times ran a piece yesterday on Elinor Ostrom and Oliver E. Williamson, winners of the Nobel Memorial Prize in Economic Sciences.

Of particular note:
“Conservatives used the tragedy of the commons to argue for property rights, and efficiency was achieved as people were thrown off the commons,” said Joseph E. Stiglitz of Columbia University, a Nobel laureate in economics himself. “But the effects of throwing a lot of people out of their livelihood were enormous. What Ostrom has demonstrated is the existence of social control mechanisms that regulate the use of commons without having to resort to property rights.”

Ms. Ostrom’s work deals in the concept of “commons” shared by a number of people who earn their living from a common resource and have a stake, therefore, in preserving it. Her most recent research has focused on relatively small forests in undeveloped countries. Groups of people share the right to harvest lumber from a particular forest, and so they have a stake in making sure the forest survives.
Check back on Thursday for a round-up and more analysis on how people are viewing this achievement.

Tuesday, October 6, 2009

Poverty and the Commons

The Coalition for Human Needs issued a release (PDF) this week compiling very grim poverty statistics and showing that things are simply getting worse for our nation’s poorest residents, a number that is growing daily and as always, disproportionately affects children.

Here is some of what they had to say:
Today's Census Bureau report that the number of Americans living in poverty increased by nearly 2.6 million to 13.2 percent in 2008 is a stark reminder of the toll the recession was already taking on families even before the economic picture worsened this year.

Last year's 39.8 million poor people comprise the highest number of Americans living in poverty since 1960. …. Unemployment averaged 5.8 percent last year compared with the August rate of 9.7 percent. The Economic Policy Institute estimates that assuming an average unemployment rate of 9.3 percent for 2009, poverty would increase to 14.7 percent. Higher unemployment will hit children disproportionately hard. Their poverty is expected to rise from 19 percent in 2008 to 25 percent this year, which translates into one in four children living in poverty.

In a family of three that means trying to provide children with a roof over their heads, adequate health care and a nutritious diet on an annual income of $17,163. Still worse, the proportion of children living below half the poverty line ($8,600 for a family of three) is rising steeply, from 6.4 percent in 2000 to 8.5 percent in 2008.

As I read this, I thought that people get into poverty and stay there because of lack of health insurance, lack of decent paying jobs, poor schools, and so on—the list is long. And all these things are related to poor tax policy. But what makes poverty so grinding and grim is that things which should be free, accessible, available to all are not nearly common enough. Things like safe and beautiful public parks sprinkled throughout all neighborhoods, libraries with banks of computers, books, magazines, rooms for small children to play while their parents send out resumes, with people standing by to help you use the resources there, community gardens where people grow their own food and share with their neighbors, and so on: that list also goes on and on.

I am in Montreal right now. Here there is rule that everyone has to be within walking distance of a public pool (which costs $2 to get into) and there are pools all over the city, even though you can only swim a few months of the year. Here there are banks of bicycles, which you can rent for $5 for 24 hours. These bicycle stands are all over the city, so you can rent a bike in one place and return it in another. The bikes are very nice and well maintained. And of course I am in a province that has universal health care and universal child care. Quebec has a lot of issues, and has some poverty. It is not perfect.

But what I am struck by every time I come to Canada is that we in the United States could have all of this, and more. We are just as smart, just as creative, and in many places we have better weather! All we have to do is make “the common good” our paradigm: to maintain and expand the commons and to demand fair and just taxation.

Will we do it? Or would we rather know that every time we see a bunch of small children gathered together, 25% of them are not getting enough nutrition, their parents don’t have health insurance, and their housing is probably substandard.

Yesterday someone asked me very innocently and not rhetorically, “What will it take to change your country?” I hope one of out of four children is enough.

For more information:
Click here for key points about the grim poverty and health insurance trends (PDF)
Click here for a first fast look at the national poverty and health insurance data (PDF)
You can also find national and state poverty, health insurance, and household income data and analyses on the Coalition on Human Needs website.

Thursday, October 1, 2009

Ethos of Personal Responsibility the Enemy of Commons-Based Thinking?

Yesterday, Gallup released new poll results showing that majorities (61%) of Americans say that “Americans themselves – rather than the government – have the primary responsibility for ensuring that they have health insurance.” Certainly, this reflects Americans’ long-standing skepticism over the role of government, but it also reflects a decline seen in other national polls in the belief that health care should be a government responsibility.

In some other polls, the decrease in support for the view that healthcare for all should be a governmental responsibility has declined pretty dramatically in the last year. In polls by both NYT/CBS and Fox News, support for the notion that healthcare should be the government’s responsibility fell from the mid-60% range down to 51% just in the months since Obama’s inauguration. I don’t think it’s a coincidence that this decline has happened while healthcare reform – and a public alternative to private health insurance – has been the subject of heated debate in Congress and angry town hall meetings.

As progressive commentators have noted, part of the argument of the opponents of healthcare reform has been that the 47 million Americans without health insurance are deadbeats and that their tax dollars shouldn’t be used to provide for something [those people] should be providing for themselves.

This kind of victim blaming is antithetical to commons-based thinking, and has real impacts on American’s views on issues. This isn’t to say that personal responsibility has no place in the commons, but that a balance of personal and collective responsibility is what’s needed.