Community Economic Utilities

In his book, Building the Agricultural City,[i] Robert Wolf makes a compelling case for rethinking economic development in rural America. He explains the multiple ways in which industrial economic development has systematically depleted the productivity of natural and human resources by exploiting rural people and places. The industrialization of agriculture has been a key part of this process. Rural economic development is destroying the resources upon which its productivity and economic viability ultimately depend. This cannot continue indefinitely; it quite simply is not sustainable.

Wolf proposes a “bioregional” approach to economic development as a sustainable alternative to industrial development., John Thackara, in How to Thrive in the Next Economy,[ii] defines a bioregion as “a ’life place’ that allows the regeneration of soils, watersheds and biodiversity… that is definable by natural rather than political or economic boundaries. A bioregion reimagines the man-made world as one element among a complex of interacting, co-dependent ecologies: energy, water, food production, information.”[iii] Bioregionalism is not about returning regions to some pristine natural state that existed before human intervention. Instead, it seeks to create thriving human communities and economies that function in harmony with the natural ecosystems upon which they are ultimately dependent. Bioregional economies allow the “regeneration of soils, watersheds, and biodiversity” essential for sustaining positive personal relationships and progressive human cultures.     

The “agricultural city” is the central concept of Wolf’s bioregional approach to development. An agricultural city is a bioregion that includes farms, rural residences, and small towns, as well as significant population centers.  He writes, “Rural America must become more self-reliant and self-sufficient if it hopes to avoid the trauma of another national Depression.” Thus, a bioregional agricultural city must be large enough to include significant sectors of agricultural production, processing, distribution, and consumption—as well as supporting public services. He continues, “I believe that it is imperative that we in rural America build self-reliant regional economies, and that this can only be done at the grassroots level.”[iv] He writes, “A sustainable, self-reliant economy developed at the grassroots level need not wait for the collapse of the current systems.”[v]

A major challenge of bioregionalism is effective governance. Bioregions are not defined by political boundaries but instead by ecological boundaries. Cultural values also must be considered in defining boundaries, as human culture affects the functioning of “developed” bioregions. Governments are notoriously territorial and typically have difficulties working across political boundaries. Furthermore, today’s economy shows no respect for either ecological or political boundaries. The economy is an equal opportunity extractor and exploiter within all political jurisdictions and bioregions, including some supposedly protected by law.

As Wolf points out, “regions as viable economic and cultural entities will not be a product of any government.”[vi] Governments cannot create sustainable bioregions. However, government is the only means of protecting bioregions from economic exploitation and thus the only means of creating agricultural cities as “viable economic and cultural entities.”  Obviously, agricultural cities will require some creative thinking to meet this challenge. One possible approach to solving the problem of bioregional governance would be to create bioregional alliances of public utilities. Public utilities are commonly used to provide essential public services such as electricity, water, sewers, and telecommunications. Public utilities could be organized under current laws that authorize and regulate other existing public utilities and thus would require no legislative action. Most importantly, public utilities essentially create local or regional monopolies that are protected from the exploitative pressures of economic competition.

The creation of “Community Economic Utilities” (CEUs) as independently-operated, publicly-regulated entities, within political and across political jurisdictions, would minimize government involvement. Beyond giving legal approval to establishing and operating CEUs, the only essential role of government would be public oversight. Voluntary participation or membership in any particular CEU would minimize local political or community resistance to the CEU as an imposition of government.

Some might question using public utilities to create agricultural cities because utilities typically are used in cases that economists refer to as “natural monopolies.” For example, it’s logical to utilize only one electrical system, water system, or sewer system in a city or county because of the high cost of building and maintaining the infrastructure for these systems. The existence of only one service provider would constitute a monopoly, with monopoly power to exploit its customers. Thus the justification for government intervention. However, public utilities are equally appropriate in any case of “market failure.” Natural monopolies are but one example of market failure. The ecological, social, and economic exploitation of rural America under the guise of rural economic development is clearly a “market failure.”

In general, public utilities are legitimate means of providing any essential public service that competitive market economies will not provide. For example, in the early 1950s, many residences in rural areas were still without electricity. Those without “power” typically lived on farms that would have required extension of existing “power lines” for several miles to service a few customers who initially would use very little electricity. It didn’t make economic sense to extend the existing power lines. This was not a natural monopoly because there was no economic benefit to be monopolized. It was nonetheless a “market failure.” The Rural Electrification Association (REA), a public utility, was established to provide electricity to those remaining without power, regardless of the economic costs and benefits of doing so. The REA even paid electricians to install electrical wiring in old farmhouses, which was a costly undertaking. Access to electricity had become an “essential public service,” rather than a market privilege.

Some local businesses may contend that a CEU would represent unfair competition with existing providers. However, public utilities are often used to provide essential public services when private services exist but are inadequate to meet the needs of all, as in the case of rural electrification. Another example is public transportation, including buses, light rails, and even taxi cabs, which are either provided by municipalities or regulated as public utilities. Public transportation obviously competes with private transportation providers. Public utilities are also currently being used to extend high-speed internet service to rural areas. This public alternative clearly competes with existing services provided via satellite. Such cases nonetheless address legitimate market failures. 

In addition, since membership in CEUs would be voluntary, a CEU would have no monopoly power because private providers would still be able to compete for members. However, CEUs would still allow people in rural communities to establish economic boundaries within which they can provide specific public services by means that are “insulated,” even if not isolated, from exploitative economic competition. CEUs eventually would need to blanket the bioregion if they are to protect the bioregion as a whole from economic exploitation. This might be a challenge, but it would not be a particular problem, as a self-sufficient, sustainable agricultural city eventually must function with the “consent of the people” in the bioregion, regardless of how it begins.

The justification for utilizing CEUs to create agricultural cities would need to be premised on the claim of “market failure”—specifically, the failure of today’s market economy to meet the basic economic needs of people in rural America. The existence of a variety of government-funded social welfare programs provides strong evidence of such a claim of market failure.  Supplemental Nutritional Assistance programs (SNAP or food stamps), free and reduced price school lunches, Medicaid, low-income housing assistance, public transportation, and temporary income assistance for needy families (TANF), are examples of the current piecemeal approach to meeting the basic human needs of the least fortunate Americans. Such programs mitigate the market failure but obviously have failed to ensure that the basic human needs of many, if not most, people in rural America are met. CEUs would provide a local government-sanctioned, voluntary alternative means of meeting the basic economic needs of all. 

A further argument could be made that the basic needs of future generations are being threatened by the degradation and depletion of rural natural and human resources upon which those of the future must depend for their food, clothing, housing, and overall economic well-being. Everything of use to humans, including everything of economic value, ultimately comes from nature by way of society. Current government-funded programs for soil and water conservation, sustainable forestry, environmental protection, renewable energy, organic and sustainable farming, reflect a piecemeal approach to protecting and maintaining the productivity of natural resources for the benefit of future generations. Public education, subsidized college loans, job training, civil rights laws, and public defenders are examples of government programs that invest in human resources for the future and protect the civility and integrity of society upon which future economic development ultimately depends.      

CEUs could be established to administer all existing government benefits that members of the utility are eligible to receive. Separate utilities could be established for food, housing, energy, health care, transportation, soil and water conservation, education, civil liberties, etc., either within or across political jurisdictions within bioregions. Regardless, all CEUs within the bioregion would need to conform to a common set of guiding principles. An umbrella CEU for the bioregion as a whole could ensure the social and ecological integrity of all CEUs in the bioregion. The mission of the alliance of bioregional CEU as a whole would be to build self-reliant regional economies by empowering people at the grassroots. As Robert Wolf wrote, “A sustainable, self-reliant economy developed at the grassroots level need not wait for the collapse of the current systems.”[vii]

Umbrella bioregional CEUs could ensure that the individual public utilities were organized and operated by means that help restore and sustain the ecological, social, and economic integrity of the bioregion. The bioregional CEUs could also help those creating individual CEUs within the region to make the case with local government officials to allocate local tax dollars, to the extent necessary, to compensate the utilities for the economic costs of resource conservation, environmental protection, social integration, and cultural preservation. Those who choose to join CEUs would be expected to bear some of these costs as an expression of their personal values and commitments—particularly to the extent that costs of operating CEUs exceed existing government funding. However, local taxpayers in general also must be willing to allocate local tax funds to local CEUs that provide essential public services not currently provided by the government.

Since CEU membership would be voluntary, agricultural cities would incrementally emerge and gradually grow within the existing political jurisdictions of bioregions covered by umbrella CEUs. The emergence of Wolf’s vision of agricultural cities would depend on increasing the number of CEU members within bioregions until members eventually represent a bio-community consensus mandating local governments to protect their bioregions from economic extraction and exploitation.      

No blueprint or recipe for the development of a bioregional alliance of CFUs is possible. Creating new agricultural cities would require that each bioregion develop its own umbrella organization and set of basic principles that would increase self-reliance and sustainability. The principles must reflect the culture and ecology of the particular bioregion as essential principles of sustainable economic development. The day-to-day operation of individual CEUs also must accommodate the social and economic culture of the communities within which they are organized and function. Some communities are more altruistic and might be willing to ensure basic benefits to all in need, regardless of the willingness or ability of recipients to provide anything in return. Other communities are more utilitarian and require that people earn or be willing to work for whatever they receive beyond current government benefits.

Over time, the ability of CEUs to locally source food, shelter, energy, health care, education, and other basic needs would be expected to expand beyond the needs of those eligible for existing government programs to include everyone in the bioregion. At that point, benefits could be made available for purchase by anyone in the community covered by a CEU. The cost of membership to those not eligible for government programs should be sufficient to cover the CEU’s full cost of operation, in order to avoid unfair competition with other local service providers.

When shopping in a CEU supermarket, eating in the CEU restaurant, receiving CEU health care, or participating in a CEU educational program, a community member who paid the full cost of membership would be indistinguishable from those who paid less than full cost, worked for their added CEU benefits, or were unable to contribute anything of economic value. Relationships formed by patronizing and participating in CEUs would perhaps be the most important community-building aspect of using CEUs to build agricultural cities.

Relationships within agricultural cities would not be impersonal economic or political relationships but relationships based on shared commitments to the fundamental principles of self-reliance and sustainability. The shared commitment would be to the people’s right to meet their basic economic needs through means that are ecologically sound and socially responsible and their right to protect themselves and their communities from economic exploitation. As the concept of agricultural cities spreads across and beyond rural America, cities, states, national, and global economies would begin to move toward a more just and sustainable future for humanity.

Endnotes:

[i] Wolf, R. (2016). Building the Agricultural City; Handbook for Rural Renewal. Decorah, Iowa, Ruskin Press.

[ii] Thakara, J. (2015). How to Thrive in the New Economy. London, Thames & Hudson.

[iii] Thakara. p 29.

[iv] Wolf, p 13.

[v] Wolf. Agricultural Cities. p 12.

[vi] Wolf, p 40.

[vii] Wolf. Agricultural Cities. p 12.