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Toward a Green Folkhem: Climate Change as if Social Justice Matters

It is the hallmark of any deep truth that its negation is also a deep truth.”Neils Bohr 

Around the middle of the 20th century, Sweden could safely be declared a socialist paradise. Its generous welfare state offered universal healthcare, paid parental leave, pensions, preschool care, progressive taxes, and a system of high-quality eldercare. But these accomplishments tell only half of the story. The small nation of Sweden also developed an impressive array of internationally recognized companies—Ericsson, Electrolux, IKEA, Saab, Skandia, Volvo, and others—that showcased the country as a capitalist paradise.

These achievements materialized in no small part realized by virtue of the Swedish societal concept of Folkhem (“People’s Home”). Conceived by Socialist Prime Minister Per Albin Hansson, Folkhem emerged in the aftermath of the Great Depression in Sweden. It served as a conceptual guiding principle for political and economic decisions from the 1930s until well into the 1970s, when increasing worker militarism started destabilized elements of the system.

 

The Grand Hotel Saltsjobaden, the site of the negotiations and signing of the 1938 Saltsjöbaden Agreement.

 

Folkhem was built on the bedrock of the 1938 Saltsjöbaden Agreement, a nonaggression pact between workers and management. The Socialist government helped bring the two sides together by threatening anti-management legislation against a bourgeoisie already living in fear of a rising Marxist tide. Instead of waging a fragmentary class war, leading to a one-sided dictatorship of the proletariat, Swedish socialists conceived society as a whole and built a balanced system: the One (state) holding an interdependent tension, and the Few (bourgeoisie) and the Many (working classes) working for the benefit of the All (Sweden).

 

Fragmenting Dogma—Unity in Complementary Opposites

“There is unity in the world, but it is a unity formed by the combination of opposites.” Bertrand Russell

Folkhem’s success is yet another confirmation of the wisdom of Sun Tzu’s strategic ideas, based on the Chinese philosophy of Yin and Yang. Sun Tzu taught that seemingly opposite forces were better conceived of as naturally complementary components of the same system. This concept is demonstrated in the etymological origins of Yin (dark side of the mountain) and Yang (sunny side of the mountain). Some other examples are fire/water, creation/destruction, risk/benefit, supply/demand, predator/prey. The key to a successful strategy is manipulating these complementary forces in ways that achieve Sun Tzu’s overarching goal: “victory without conflict.” Folkhem provided a societal framework that suspended opposing forces in complementary tension and interdependence. Both bourgeoisie/proletariat and capitalism/socialism were paired in a dynamic equilibrium that brought out the productive best of each while simultaneously suppressing the other’s more malignant tendencies.

 

Journal Decroissance, a 2016 French “de-growth” poster. The main text reads “Die for Growth” and the letters “PNB” are French for GDP.

 

Today, the ongoing pandemic is focusing attention on two seemingly contradictory schools of thought. Fiscal expansion, full employment, and increased social programs are among the policy goals of Modern Monetary Theory (MMT). MMT is a macroeconomic approach that advocates increased government spending. Décroissance (“degrowth”) is, in contrast, an environmental movement that champions gradually decreasing economic growth, eventually triggering drops in carbon emissions below the Earth’s capacity for reabsorption. Given the current reality of political power, the ascendant Few can use MMT to enrich themselves, while deploying décroissance to wither the Many with austerity. 

Embedding these two complementary working theories within the Folkhem social framework reverses this deleterious dynamic. MMT financing, directed toward ameliorating social inequality, would provide the underpinning required to execute décroissance’s goal of bringing consumption down to sustainable levels. Thus embedded, the two working theories are placed in a role of mutually tempering the other’s malignant tendencies while simultaneously supporting their many benign elements. The result is a robust conceptual theory for solving the climate crisis, a Green Folkhem.

 

Systemizing the Fragments—A Green Folkhem 

“The good home knows no privileged or disadvantaged, no golden children and no scapegoats. One does not look down on the other there. No one tries to gain advantage at the expense of others there. The strong do not oppress and plunder the weak. In the good home there is equality, care, cooperation, and helpfulness. Applied to the large people’s and citizens’ home, this would mean the demolition of social and economic barriers, which now separate citizens into privileged and disadvantaged, ruling and dependent, looting and looted.” Per Albin Hannson

Successful societies balance the interplay between the universal and the particular aspects of human nature. Humans are a species distinguished by numerous and diverse cultural expressions. Green Folkhem expresses universal aspects of humanity by striving to unify the globe toward the objective of reducing carbon emissions through declines in both economic activity and demographic numbers. The wealthy industrial nations are both the primary cause of the problem and generally—with the unfortunate exception of the U.S.—the most motivated to fix the problem. This is, therefore, the initial and primary area of application of a Green Folkhem concept. Given the décroissance impetus to collocate production and consumption, a green reindustrialization movement will shift much production out of Second World producer nations and toward the First World. In response, today’s producer nations will have to stimulate domestic consumption to partially compensate for the loss of First World consumers. The Third World contributes least to the climate crisis and so will be less impacted by its resolution. Rapid demographic growth is the most common Third World ecological issue, but that is a problem for which local solutions must be found and not to be imposed by the First World, which, in reducing its own population, creates time and space for the Third World to resolve its unsustainable demographic growth.

Ideas are not enough, however; an appropriate political ecosystem is where they will flourish. A fundamental strategic goal of décroissance is citizens striving for political innovation and economic autonomy at the local level. Therefore, a Green Folkhem is necessarily descalable. Due to its reliance on MMT, the national Folkhem extends to a sovereign issuer of currency’s borders. Within this national Folkhem are many local Folkhem, all with similar values of both connecting consumption to production and in reducing it. Local currencies may arise to reinforce social security, but must always keep fiscal link to the national Folkhem. Universal, global goals are met by diverse local action. The Folkhem concept is vernacular, adaptable to fit local custom and particularities.

The social foundation of a Green Folkhem is a nonaggression social pact between the Few and the Many. Social justice is exchanged for moderation of wage demands necessary in a climate of worker scarcity, which the Green Folkhem will provoke. Fear of an approaching climate crisis provides the motivation for today’s Few to offer class peace to the Many, replacing the fear of Marxism that helped spur the original Folkhem.

The stronger the social floor provided, the lower the potential ceiling on economic activity can be set. A robust social floor includes both universal social programs and tolerance of worker scarcity, which tends to raise wages. Beyond universal healthcare and affordable education, a key feature of a Green Folkhem would be a Universal Basic Income (UBI). UBI functions as a sort of release valve, setting a hard floor below which it is not possible to fall, socioeconomically. As demand for labor wanes due to automation or décroissance, a UBI provides workers with a frugal “public option” to opt out of commodity production. UBI also addresses the impacts of technological automation, a process that replaces many workers with machines that are built and maintained by fewer workers. As automation works against worker scarcity, UBI acts as a balancing outlet that, in turn, reinforces worker scarcity by allowing others to opt out of the workforce. This social floor can be financed by tapping into the fiscal exuberance of MMT.

As MMT increases the spread of wealth horizontally through society, décroissance restricts economic growth vertically by mandating annual declines in economic activity. Economic efficiency would concentrate on ensuring the maximum extraction of positive standard of living from each dollar of GDP. Consumption must be meaningful. A demographic décroissance is desirable as well, while avoiding such measures as a harsh, Chinese-style one-child policy. In wealthy societies, where décroissance must start, a favorable synergy already exists in that birth rates naturally enter décroissance by declining to below replacement levels once a certain threshold of wealth is crossed. Since salaries are determined more by supply and demand than by GDP growth, in the short to medium term, a slowly decreasing population matched to gentle GDP contraction should keep salaries stable. 

Currently, the globe is connected economically by a division of mass consumption labor or physically through mass tourism. Wealthy nations, with relatively high environmental standards, conspicuously consume cheap commodities produced in nations with low-to-nonexistent standards. A Green Folkhem’s façade serves to curate healthy global connections while discouraging the more malignant ones.

A Green Folkhem’s walls serve to protect green reindustrialization as global production reunites with consumption. This green reindustrialization is protectionist—of the climate. Based loosely on the Pareto principle, a target could be 80% of consumption being produced domestically, with the remaining 20% being imported. Green tariffs, gently climbing each year, would give the impetus. Encouraging a race to the top, these tariffs would be calibrated to reward producer nations with stronger environmental policies. Currently globalization encourages an environmental race to the bottom by boasting multinational profits for offshoring to producer nations with terrible environmental policies. With the advent of automation, the urge to arbitrage on labor differences between the First and Third World diminishes. Necessarily consumable commodity prices will rise, and, in response, consumption will fall.

Windows open to global cultural connection and exchange, often by means of virtual networks, balancing the closed nature of the Folkhem’s walls. Tourism will always exist, but must be scaled back due to the environmental damage associated with it. As the centralized physical workplace declines in use, global workplaces connected through networks become possible. There must also be active communication and learning between various Green Folkhem at different scales and locations.

 

This graph illustrates what happens if growth continues past the Earth’s biocapacity.

 

This graph shows a gradual decrease in growth back towards the Earth’s biocapacity.

 

Migration is an ancient human phenomenon. Its impact on global warming is best viewed through the concept of an Ecological Footprint (EF), which creates a sort of ecological balance sheet. Supply, expressed as a number of hectares (a hectare is 2.1 acres), represents the sustainable limit of the Earth’s resources (biocapacity) available to us: fish stocks, forests, agricultural soil capacity, and so on. Demand is a measurement of the surface area needed to satisfy the current rates of human resource consumption. Ecological overshoot occurs in a deficit situation, where human consumption demand outstrips the Earth’s sustainable resource supply. Current calculations indicate the earth contains an average 2.1 hectares of biocapacity per human, but that overall human consumption requires 2.7 hectares. This is an ecological overshoot of nearly 30% and is unsustainable. Décroissance aims to balance the Earth’s ecological budget by both lowering demand on resources and to develop technologies to make use of resources more efficiently. This rebalancing will happen either by disaster or by design. This choice is still in our hands.

Currently, economic migration encourages people from less advanced nations to migrate toward wealthy nations. This increases economic growth statistics in wealthy nations and serves to boost overall consumption. For example, Guatemala currently has an EF of only 1.8 hectares; by comparison, the U.S.’s is 8.3 hectares. Migrating from the less-advanced nations toward the wealthy ones contributes to global ecological overshoot. Migrants’ EFs increase as they adapt to their new homes. In contrast, ecological migration prefers that people from wealthy countries move to those with lower standards of living, since this means the migrant’s EF will inevitably decrease. This is migration in the right direction.

A principal long-term goal of a Green Folkhem is energy decarbonization. Globally, 80% of energy consumed today is fossil fuel–based, 10% biomass, 5% nuclear, and only 5% truly renewable (solar, wind, hydro, geothermal). Decarbonization is achieved by two complementary movements in a Green Folkhem. Pressing downward from above, décroissance decreases total economic activity, which necessarily pushes down the use of fossil fuels. Pushing up from below, MMT can help finance research into renewable fuel technologies, which will help grow their percentage of the energy market. These two trends reinforce each other. To attempt decarbonization without décroissance is to continue unchecked economic growth, which means unchecked energy use, hoping a technological silver bullet will one day emerge to save the planet. 

 

Congresswoman Alexandria Ocasio-Cortez is one of the co-sponsors of the Green New Deal legislation.

 

Last year U.S. Representative Alexandria Ocasio-Cortez announced the Green New Deal, a laundry list of social programs and environmental targets associated with sustainable energy. She was immediately asked: How are you going to pay for it? This question had already doomed proposals of universal healthcare, preschool childcare, and affordable public universities. Her response invoked MMT: “I think the first thing that we need to do is kind of break the mistaken idea that taxes pay for 100% of government expenditure.” The truth is, paying for the Green New Deal can be as simple as paying for America’s forever wars. Congress would authorize the necessary spending, and the Treasury would spend. Rep. Ocasio-Cortez has explicitly endorsed MMT, saying it needs to be ”a larger part of our conversation.” And while the Green New Deal contains no explicit limits on economic growth, it calls for “economic security,” which is ambiguous enough to perhaps be compatible with décroissance

This ambiguity is found throughout the Green New Deal resolution. For example, on green industrialization, it calls for “enacting and enforcing trade rules, procurement standards, and border adjustments with strong labor and environmental protections to stop the transfer of jobs and pollution overseas; and to grow domestic manufacturing in the United States.”

This is a hesitant step in the right direction, but seems to be oriented toward arresting future offshoring, with no mention of a corrective green reindustrialization that replaces polluting overseas manufacturing back with cleaner domestic factories. Nor does it promote the larger concept of collocating production and consumption. The list of social programs is impressive, but there is no mention of worker scarcity and a peace accord between the classes to allow this scarcity without triggering inflation fears. The principal failing of the Green New Deal is a dependence on energy decarbonization without tying it to décroissance. There is an implicit call for a Green Manhattan Project to quickly replace fossil fuels with renewable energy, all presumably while growth, including the infrastructure of the Green Manhattan Project, increases the use of fossil fuels and total energy production. This means renewable fuels are constantly striving for an even higher energy demand to satisfy as each year passes. A Green Folkhem takes the more cautious approach of lowering economic growth, knowing that if technological silver bullets were to appear, growth could be reconsidered based on this cutting-edge supply of renewable fuel.

The Green Folkhem concept takes the ambitions found in the Green New Deal and unites them in a robust conceptual frame based on the duality of MMT and décroissance. Tied to the original Folkhem precedent, additional concepts such as class peace, social floors, growth ceilings, regionalization, green reindustrialization, and migration directions would all be placed front and center for future policy debate. Many of these ideas are controversial or misunderstood and in a democratic process, there must necessarily be a period of discussion and persuasion. Given the stakes, there is no reason to stay mired in the Green New Deal’s ambiguity and half-measures. The Green Folkhem proposal seeks to immediately launch these critical conversations.

In the 1970s, Sweden’s Folkhem started to unravel, with labor militancy breaking the class peace. Currently, Denmark’s society comes closest to fulfilling the social mission of Sweden’s Folkhem. Our current challenges are different from those Sweden faced when emerging from the Great Depression. Back then, it was enough to just step on the accelerator of economic growth to create a more just society. Today we must simultaneously increase social justice while lowering economic growth. In utilizing the best of the complementary natures of MMT and décroissance, the Green Folkhem concept recognizes the dual nature of our current climate crisis. The precedents and tools are there. It is now a question of mustering both the will and the restraint to win without conflict.

Featured image: vase/faces image comes from Gestalt psychology and is meant to represent a “whole” comprised of complementary opposites. 

 

 

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