Simply stated, a well-being economy values sustainable relationships between people and the natural world more highly than material objects and money.
Our capitalist economic system privileges protection and accumulation of private wealth, to the detriment of most people and of the planet.
Financial institutions, such as banks and investment institutions, play a very important role in this capitalist vision by supporting initiatives that are “profitable” but usually at the expense of social and ecological well-being (e.g., companies whose profit stems from cutting costs on workers’ pay, security and safety, or on environmental stewardship).
These engines of capitalism operate within a broader neoliberal context of deregulation, privatization, and austerity when it comes to public services and supports.
Thinking about a well-being economy, therefore, demands that we consider the role of financial institutions in an alternative vision. Here we ask the question: What are some opportunities for financial institutions to embody a well-being economy vision?
Drawing inspiration from A Well-Being Economy for Alberta conference, we first discuss potential benefits and challenges of public banks, followed by brief comments on two other important ideas—namely, alternative budgeting and complementary currency.
All three contribute to thinking about the role of finance—i.e., the management, creation, and study of money (currency) and investment—in supporting, rather than working against, a well-being economy. We are grateful to conference presenters Thomas Marois, Niall Harney, and Jared Blustein for their compelling and inspiring insights.
Public banks—banks that are in the public, rather than the private, sphere—potentially have a significant role to play in efforts to decarbonize our society, reduce financialization, and democratize decision-making.
In his book Public Banks: Decarbonisation, Definancialisation, and Democratisation and conference presentation, Thomas Marois noted that public banks are a significant part of the international financial system—more so than most people realize. There are over 900 public banks in existence and they control approximately $49 trillion. They range from full service commercial and personal banks, like Alberta’s ATB Financial (the only public retail bank in Canada), to international development agencies.
Public banks include local development banks, such as Banco Popular in Costa Rica, where most Costa Rican workers have an account. A workers’ assembly of 290 members from 10 social and economic sectors, with gender equality inscribed in the governance structure, makes Banco Popular the most democratic public bank in the world. Another democratically governed institution is Germany’s Kreditanstalt fur Wiederaufbau, (KfW), which was originally established to fund reconstruction.
Marois argues that public banks are neither essentially good nor bad, and that each has a unique history whose structure and function are defined by social and institutional forces.
In many cases, powerful neoliberal forces result in public banks, including ATB Financial and the Canada Infrastructure Bank (CIB), supporting capital accumulation rather than embracing a goal of public and planetary well-being.
CIB’s function, for example, is to underwrite project risks to guarantee investors’ expected rates of return. While this includes investment in green infrastructure, it must be emphasized that the driving principle is not decarbonization, it’s private capital accumulation. More recently, some public banks, including the Nordic Investment Bank, have ceased lending to fossil fuel projects, thus illustrating these institutions’ potentially significant leverage.
Financialization refers to the power of financial institutions (private banks, insurers, institutional investors) to fuse their financial interests with those of state agencies. This pernicious symbiosis seeks to ensure that the dominance of capital accumulation pervades key public sector institutions.
In Canada, this agreement is manifest in federal legislation that limits provinces’ ownership of bank shares and a long-held policy that does not allow Canadian governments to apply for a bank charter. This makes it very difficult, although not impossible, for provinces to pursue de-financialization through public banks.
From the point of view of well-being, Alberta’s public bank, ATB Financial, provides an unfortunate example of a mandate that supports private capital accumulation in an oil and gas-dominated economy.
In 2019, the new United Conservative Party (UCP) provincial government explicitly reinforced ATB’s support for capital accumulation by amending the ATB Financial Act to require the institution to “seek to earn risk-adjusted rates of return that are similar to or better than the returns of comparable financial institutions in both the short term and the long term.”
In 2018, the Parkland Institute published Alberta’s Public Bank, a report that offered some modest suggestions to make ATB more of a policy instrument for public—social and ecological—good.
As one example, ATB Financial would be an ideal vehicle for Alberta to fund programs to decarbonize Alberta’s fossil fuel economy. ATB could show leadership by helping people finance the retrofitting of homes, the deployment of solar or geothermal energy sources, and the purchase of heat pumps without requiring a capitalist premium of profit.
However, in the past 12 months, ATB has grown its mining, oil and gas extraction loans by a whopping 28 per cent, at a time where climate catastrophe is no longer a distant prospect.
A second example is housing. A critical problem facing most provinces is the absence of affordable and acceptable shelter, which is a basic human right. Canadian governments at all levels have failed to create sufficient, affordable housing.
In large part this is due to the financialization of housing, which has changed many Canadians’ attitudes from seeing housing as a home to seeing housing as an instrument for investment speculation. ATB could help to address the housing crisis by, for example, providing at-cost mortgages to low-income households.
With respect to public banks’ potential for democratization, ATB’s current governance structure is undemocratic in that appointments are controlled by the existing board and the finance minister. While efforts have been made to obtain gender balance, the absence of labour, not-for-profit, scientific, First Nations and Métis, and local government representatives reinforces the top-down, for-profit model. Broad civil society mobilization is required to redress this situation.
Alternative public budgeting
Powerful neoliberal trends have led to widening inequalities of resources and power, and financialization has led to state agencies and processes adopting the financial interests of private entities. Government budgets, therefore, are not in the interests of the public; they operate in the interests of a small minority of powerful people.
In his comments, Niall Harney of the Canadian Centre for Policy Alternatives’ Manitoba Office described an important form of civil society resistance against these dynamics, namely alternative budgeting, which was developed in Winnipeg in the 1990s by progressive economist John Loxley and a community group called Cho!ces.
It was in response to cutbacks to program spending orchestrated by then federal Finance Minister Paul Martin in the mid-1990s, which were downloaded to provinces and municipalities under the “TINA” (“there is no alternative”) narrative. This forum of citizen participation pushed back against the fiscal austerity budgeting.
Alternative budgets for the City of Winnipeg and for the province of Manitoba have had important influences. Examples include the implementation of an impact fee on suburban land development to more accurately reflect the costs of suburban development for municipal services and the implementation of low-income transit passes. The Winnipeg alternative budget has also created space for discussion on property taxes. Areas of focus are developed by community activists from various sectors, including labour, non-profit, and First Nations. They include issues like housing, recreation, libraries, parks, transit, zoning, and policing.
For more information about this important idea, the reader is directed to Alternative Budgets: Budgeting as if People Mattered by John Loxley, recent iterations of the Winnipeg municipal budget, and the CCPA National Office’s annual alternative federal budget.
Efforts to transform our economy to one that works for people and the planet requires thinking not only about large institutions, such as governments and banks, but also “hyper-localized civil society” solutions. An important example is complementary currency.
Jared Blustein of the Arusha Centre in Calgary situated his comments in the context of growing economic inequality and commodification.
Calgary Dollars have been Calgary’s local currency since 1995. This currency, which can only be spent in Calgary, is a tool that can be used in ways that support circular economy and reduce Calgary’s footprint, including supporting local vendors and businesses to create a more resilient economy, building community, and earning supplementary income.
As one important example, residents of participating agencies earn Calgary Dollars through a variety of community building and maintenance tasks. The Calgary Dollars earned may, in turn, be used to pay a portion of rent and to spend at local businesses.
Complementary currencies like Calgary dollars represent a community development approach, which takes on the incredibly important task of removing corporate influence by reframing money as a medium of trade and nothing more. It thereby acts to build a bigger space in society to push back against corporate capture of the nation state.
To envision a well-being economy, we must consider alternatives to neoliberal capitalism and the institutions—including banks, government budgets, and currency—that perpetuate it. Public banks, alternative budgeting, and complementary currency represent three important and energizing ideas.