Designing Rules as If Community Matters – Marrying Authority, Responsibility and Capacity Through New Rules Supporting Local Self-Reliance

“All human societies are governed by rules. We make the rules and the rules make us.”

“Institutions and habits and paradigms have an enormous built-in inertia. The conventional wisdom doesn’t change simply because the rationale for it has disappeared.”

“What if, instead of raising the height of smokestacks, the Clean Air Act required factories to lower them, and to curve the end of the stack so that emissions went into the CEO’s office? We would have married authority and responsibility, eliminating the distance between the actor and the acted upon, imposing the costs and benefits of a decision on the same community. The nation’s CEOs, I believe, would have expeditiously ordered their industrial engineers to design zero-emission production processes.”

“Just as globalism is mistaken for progress, localism is often confused with a desire to reverse technology, or turn back the clock. There is nothing inherently progressive about globalization, and there is nothing inherently backwards-looking about localism.”

Circumstances and Rules

The scale of public and private institutions continues to grow, and those who make the relevant decisions (or rules) are ever more remote from those who feel the impact of their decisions.

The conventional wisdom that bigger is better emerged from the unprecedented technological dynamic of the late-nineteenth and early-twentieth centuries. Steel replaced wood. Fossil fuels replaced wind and water mills. Mass production replaced cottage industry. Railroads and then cars replaced the horse and buggy. Markets expanded geometrically. Commerce overflowed regional boundaries and became a national and international affair.

We designed rules to fit this new state of affairs. State legislatures granted private electric companies the governmental authority to seize private property to build high-voltage transmission lines, because bigger power plants generated cheaper electricity than smaller plants. Because jet planes reduced the travel time from New York to California from days to hours, Congress preempted state and local authority over jet noise, even though it is one hundred times louder than the noise communities regulate through disturbing-the-peace ordinances.

Today, however, the technological and social and political context and dynamic have profoundly changed. The newest technologies are potentially decentralizing: personal computers, solar energy devices, desktop manufacturing, electric vehicles. Meanwhile, transportation advances are incremental at best. (Indeed, because of airport and road congestion, it takes longer to fly or drive from point A to point B than it did twenty-five years ago.) A century ago, the environmental costs of extraction, manufacturing, and transportation were ignored. Today, they are increasingly important, encouraging engineers to design more ecologically benign production systems that often shorten the distance between the raw materials, the manufacturer, and the customer.

The external context has changed, but the rules, for the most part, have not. Institutions and habits and paradigms have an enormous built-in inertia. The conventional wisdom doesn’t change simply because the rationale for it has disappeared.

We need new rules, ones that promote local self-reliance.

Why new rules ?

Because the old ones don’t work any longer. They undermine local economies, subvert democracy, weaken our sense of community, and ignore the costs of our decisions on the next generation.

Why local self-reliance ?

The Case and Theory of Local Self-Reliance and the New Rules

Local self-reliance challenges the reigning economic orthodoxy, embraced by all political parties, that bigger is better and global is best of all. It is remarkable how little empirical data actually supports that thesis. Study after study concludes that in education, for example, small schools are best. (And is there a better example of the local institution than the public school?) Small schools have less absenteeism, lower dropout rates, fewer disciplinary problems, and higher rates of teacher satisfaction than large schools. According to the Federal Reserve, community-scaled banks are as efficient, and usually more profitable, than large banks. And they serve the community’s small businesses, students, and households better. Small manufacturers generate more innovation and more new employment than big business. Smaller farms are more resource-efficient than larger farms. Smaller cities are more cost-effectively managed than bigger cities.

Local self-reliance argues that strong communities should be valued and nurtured not only for their capacity to enhance personal security but also because of their problem-solving capacity. Many, perhaps most, of our global and national problems can most effectively be resolved at the local level. The most effective and enduring decisions occur when those who make the decisions are those who feel the impact of the decisions, where costs and benefits fall on the same community. Societies work best when authority is married to responsibility and capacity, when rules channel scientific ingenuity, entrepreneurial energy, and investment capital into creating systems that allow us to extract the maximum value (in a sustainable manner) from local resources – human, capital, natural.

Does local self-reliance encourage parochialism and insularity? I doubt it. Self-confident communities, like self-confident people, are better able to deal with strangers and the outside world. And the internet allows communities, for the first time in history, to share information horizontally.

One could posit a future defined by two metaphors: a global village and a globe of villages. The global village is based on the exchange of information products; the internet is inherently global. The globe of villages is based on the decentralized extraction and processing of raw materials into finished products. It’s one world of information, but many smaller worlds of production. That’s a sane way to balance our strivings for global interconnectedness and local community.

There is no catechism of local self-reliance, but the writings of Adam Smith and Peter Kropotkin offer excellent guides to its moral foundation. Smith’s Theory of Moral Sentiments, an important book, published in 1759 and overshadowed by the fame of its successor, The Wealth of Nations, maintains that an innate human capacity for empathy and sympathy is the foundation of a well-functioning society. A hundred years later, after a painstaking examination of the dynamics of the animal and human kingdoms, Kropotkin went further. “Mutual aid” (which became the title of his seminal book) and not Darwin’s tooth-and-claw struggle for survival, he argued, was the driving force behind innovation and progress.

What types of rules might enable local self-reliance?

Local self-reliance has three cornerstones: authority, responsibility, capacity. We call it the ARC of community. Without authority, democracy is meaningless. As Alexis de Tocqueville wisely noted, “Without power and independence, a town may contain good subjects, but it can contain no active citizens.” Without responsibility, chaos ensues. It is indeed every man and woman and child for themselves, and the public interest be damned. Without a productive capacity, that is, the capacity to produce real wealth, we do not have the practical knowledge to manage our affairs nor the might to determine our economic future.

In other words, the new rules rules call for:

• Decisions made by those who will feel the impact of those decisions.
• Communities accepting responsibility for the welfare of their members and for the next generation.
• Households and communities possessing or owning sufficient productive capacity to generate real wealth.

These are a set of new rules that builds community by supporting humanly scaled politics and economics, an economic and political local self-reliance, the principles of “new localism”, rules that honor a sense of place and prize rootedness, continuity and stability as well as innovation and enterprise. They call upon us to begin viewing our communities and our regions not only as places of residence, recreation and retail but as places that nurture active and informed citizens with the skills and productive capacity to generate real wealth and the authority to govern their own lives.

Authority, responsibility, capacity – that’s local self-reliance.

It’s a flexible, pragmatic vision that should be attractive to people of all political persuasions, if only they could see past their own slogans and cliches. There’s hopeful evidence that many of them are beginning to. If that’s so, it’s our towns and cities–all of us, that is–who will reap the benefits.

Questioning Local Self-Reliance

Isn’t it unrealistic to expect communities to be self-sufficient?

Yes, it is. Localism does not mean self-sufficiency. Nations are not self-sufficient, and neither are communities. But nations that are self-conscious and self-determining are stronger because of it. The same holds true for communities.

But aren’t there economies of scale?

Yes, but empirical evidence has shown us that in many important areas–education, health, manufacturing, farming, the generation of power, for instance–it is not globalism and bigness, but localism and smallness that are more cost-effective, more profitable, more environmentally benign, more democratic, more enduring. The only thing that smallness lacks is power, the power to make the rules.

Doesn’t localism pose a threat to those who are not in the majority? Doesn’t it allow those with means, or power, to secede from responsibility for the whole, leaving the powerless behind?

If localism were absolute, yes, it would do that. But it is not. Localism is an approach that allows us to sort out which roles are appropriate for which levels of government. Guarantees of basic rights must come from the federal level. Higher levels of government appropriately should set floors–e.g., a minimum wage or a minimum level of environmental compliance or minimum guarantees of political rights– but not ceilings. They should not pre-empt lower levels of government from exceeding those minimums (as international trade agreements do, for instance.)

Why would localism guarantee efficient, environmentally benign development?

It doesn’t. There are no guarantees in a true democracy, because power rests with the citizens. But it does create the possibility. And without localism, we are guaranteed the opposite: rootless corporations with no allegiance to place, other than to the place with the lowest wages and least environmental restrictions; long lines of transportation, which are inherently polluting; and out-of-scale development that wrecks neighborhoods and destroys habitat. By its very nature, localism would shorten transportation lines, encourage rooted businesses, demand an active citizenry. Localism is a development concept that would enable humanly-scaled, environmentally healthy, politically active, economically robust communities.

Isn’t localism simply nostalgia for a simpler time?

No. Just as globalism is mistaken for progress, localism is often confused with a desire to reverse technology, or turn back the clock. There is nothing inherently progressive about globalization, and there is nothing inherently backwards-looking about localism. Localism has to do with (1) where decisions are made, and (2) the principles guiding those decisions. Those are issues that will and should remain central to society throughout time.

Is localism anti-technology?

The new localism relies on some of the most sophisticated technologies (e.g. integrated pest management, flexible manufacturing, solar cells.) At the end of the 19th century, as we switched from wood to steel, from water wheels to fossil fueled central power plants, and from craft shops to mass production, technology seemed to demand larger scale production systems and economies. At the end of the 20th century, as we switch from minerals to vegetables, from fossil fuels to solar energy, and from mass production to batch production, technological progress encourages decentralized, localized economies.

The Practice of Local Self-Reliance Through New Rules

In 1988, Michigan designed a good law. It was a waste law.

Every county was required to develop an in-county landfill with a minimum twenty-year capacity to handle the county’s garbage. In return for forcing the county to become responsible for dealing with its own wastes, the state granted it the authority to prohibit the importation of solid waste from other communities inside and outside Michigan. The law did one thing particularly well: it married authority and responsibility. But the Supreme Court overturned the law. The justices insisted that the regulation of garbage is governed by the U.S. Constitution’s interstate commerce clause, so that the states may not impede the flow of commerce, even when “commerce” is garbage, a product society wants to diminish.

While that is an example of innovation hindered by system inertia, in the following areas of our life, new rules are beginning to take shape, to materialize, to be enacted upon.

Agriculture

Agriculture is the foundation of all sustainable wealth. Even today, when agriculture plays a diminishing role, the productivity of the soil and the health of farmers are still a fundamental concern. This section of the New Rules offers information on agricultural policies and a library of local, state, national and international rules that nurture vibrant and diversified rural communities.

New rules concerning agriculture: Banning Corporate Ownership, Expanding Local Markets, Farmer’s Markets, University Support of Locally Grown Foods, Agricultural Cooperatives, Anti-Price Discrimination Laws, Biobased Products, Ethanol and Biodiesel Production, Family Farm Tax Break, GMO Fish Labeling, Packers and Stockyards Act, Place-Of-Origin Labeling, Price Reporting, Protecting Contract Growers, Regulating Large-Scale Feedlots

Energy

Energy is the force of industrial economies, both literally and figuratively. We named this section Democratic Energy and we report on the rapidly growing movement by households, businesses, and local and state governments to democratize the energy system. We offer actual rules, from statutes and zoning codes to utility tariffs, that encourage technologies and ownership forms and systems that decentralize power and energy production and energy policy decisionmaking.

New rules concerning energy: Climate Change, Community as the Default Electicity Provider, Distributed Generation in Local Plans, Green Citizenship vs. Green Pricing, Mercury Pollution, Municipal Utility Formation, Net Metering Solar Energy, PV Pioneer Program, Renewable Energy Mandates, Renewable Fuels Standard, Solar Incentives, SUV Fees, Biobased Cooperatives, Distributed Generation – Removing Barriers and Interconnection Standards, Electricity Disclosure, Energy Efficiency, Ethanol and Biodiesel Production, Low-Income Energy Consumer Protection, Pollution Tax Shift, Renewable Energy – In-State Preference, Renewable Energy Mandates, Renewable Portfolio Standards, Small-Scale Wind Energy, Solar Power on State Buildings, Utility Merger Moratoriums, Utility Revenues Tied To Increased Efficiency, Wind Energy Taxes, Distributed Generation in Regional Plans, Home Energy Generation Act

Environment

Without responsibility, authority will be exercised in shortsighted ways. This section of the web site identifies rules that encourage communities to adopt a longer perspective and embrace policies that are respnsible to the next generation. The most enduring way to reduce pollution is to extract the maximum value from local resources. The higher the efficiency, the lower the waste, the lower the pollution.

New rules concerning the environment: Climate Change, Community Impact Study, Environmental Monitoring, Environmental Preferable Purchasing, Fertilizer & Pesticide Taxes, Land Use Policy, Light Pollution, Local Wood vs. Tropical Wood, Mercury Pollution, Noise Pollution, Recycling & Solid Waste, Agricultural Cooperatives, Billboard Bans, Biobased Products, Cell Tower and Communication Towers, Corporate Good Character Law, Energy Code, Environmental Preferable Purchasing, Ethanol and Biodiesel Production, Fertilizer and Pesticide Taxes, Groundwater Protection, Hazardous Waste Tax, Land Gains Tax, Land Value Taxation, Off Road Vehicles and ATV Regulation, Renewable Portfolio Standards, Right to Know Laws, Toxic Flame Retardants (PBDEs) Ban, Tractor-trailer Ban on Roads, Domestic Phaseout of CFCs, Dutch Investigation of a Kilometer Tax, European Chemical Regulations

Equity

This section identifies rules that encourage communities to accept responsibility in two areas: towards their own less fortunate members and less fortunate members in other communities, and towards members of the next generation. Among the topics are education, health care and living wage.

New rules concerning equity: Income Inequality, Living Wage, State Earned Income Tax Credit, Asset Building, Health Care, Canadian Health Care System, Community Health Plan Models, Single-Payer and Universal Health Care Efforts, States’ Rights to Innovate in Health Care Act, Education Equity in School, Finance Small Schools vs. Big Schools, Universal Access to Pre-School, Insurance, Medical Malpractice Insurance Rate Regulation, Mile-Based Auto Insurance

Finance

The delinking of money from place and productive investment is not the inevitable result of technological advances or economic evolution. Money is a human invention and the rules that control its dynamic are also a human invention. The rules we have fashioned favor mobility over community, speculation over productive investment, volatility over permanence. This section contains rules that reconnect capital and community, with a special emphasis on those parts of the community that traditionally have been left behind.

New rules concerning finance: ATM Surcharge Bans, Public Art Credit Unions, Market Share Caps, Public Art, The Bank of North Dakota, Canadian-Style Venture Capital, Employee Ownership, Community Reinvestment Act, Financial Transaction Tax

Governance

Governance works best when those who feel the impact of the decisions are those involved in making the decisions. That principle works as well in the private sector as the public sector. This section of the web site focuses largely on process. It examines the mechanisms and rules that encourage the most democratic and socially responsible kinds of decisionmaking.

New rules concerning governance: Embracing Subsidiarity, Marrying Authority and Responsibility, Devolving Economic Power as Well as Political Authority, Democratizing Productive Capacity, Enacting Minimum, Not Maximum Standards, Banning Water Withdrawal by Corporations Campaign, Finance Reform, Regional Governance, Initiative and Referendum, Proportional Representation, Town Meetings, Unified Development Budgets, Civil Rights Protection, Municipal Employee Residency Requirements, Devolution and Preemption, Privatization Procedures, Anti-Piracy Ordinances, Corporate Accountability, Purchasing Preferences, Campaign Finance Reform, In-State Processing Requirements, Anti-Piracy Ordinances, Purchasing Preferences.

Information

Information economies are inherently global in reach. Yet the information economy also holds great promise for dramatically decentralizing the production and dissemination of information in all its forms (e.g. print, video, radio, online). This section explores policies that cities, states, nations, and international bodies are developing to encourage a sense of place and individual autonomy and security in an age of global information systems.

New rules concerning information : Municipal Telecommunications, Curbing Commercialization of Public Space, Open Access to Cable and Telephone Lines, Low-Power Radio Community Wireless Networks, Localizing the Internet: Five Ways Public Ownership Solves the U.S. Broadband Problem, Who Will Own Minnesota’s Information Highways?

Retail

Retail is where business meets household, where enterprise meets community, where the value-added of the extraction, processing, manufacturing, wholesaling and distribution chain culiminates with sales to the final customer. We named this section the Hometown Advantage and we cover news and rules that communities are using to foster local ownership of retail and a more intimate link between commerce and place.

New rules concerning retail: Community Impact Review, Comprehensive Plans, Development Moratoria Formula, Business Restrictions, Local Purchasing Preferences, Neighborhood-Serving Zones, Preventing Vacant Boxes Store, Size Caps, Regional Impact Review, Tax-Base Sharing, Big Box Tax, Corporate Income Tax Reform, Curbing Corporate Welfare, Economic Impact Review, Internet Sales Tax Fairness, Limiting Vertical Integration, Pharmacy Equity Laws, Protecting Franchisees, Antitrust: Price Discrimination, Community-Owned Sports, Living Wage

Taxation

Taxation is the most visible and perhaps the most important issue to voters and policymakers around the world. In this section we will be gathering the tax rules from across all sectors and presenting them here. Taxation, often criticized as excessive government, can be an important policy tool to meet community goals. Taxes can be used to level the playing field, to limit size or sprawl, to protect the environment, and to encourage local ownership and production.

New rules conerning taxation: Small-Scale Ethanol Production Incentives, Tax Policy Promoting Farmer-Owned Cooperatives, State Incentives for Renewable Energy, Distance-based Fees, Fertilizer and Pesticide Tax Policy, Hazardous Waste Tax Policy, Land Gains Tax, Land Value Tax Policy, Ozone Depleting Chemicals Taxation, Regional Tax Base Sharing, Renewable Energy Mitigation Program, Financing Education, Financial Transaction Tax, Venture Capital – Canadian Model, Internet Tax Policy, Curbing Corporate Welfare, State Tax Fairness – Combined Reporting, State Tax Fairness – Throwback Rules

This article is a summary of the following sources :

1. “It Takes a City – how better rules and regulations promote local self-reliance” by David Morris at In Character – A Journal of Everyday Virtues
2. “Why New Rules?” by The Institute for Local Self-Reliance (ILSR)

Keywords : rules, laws, community, authorithy, responsibility, capacity, local self-reliance, globalization vs. relocalization, new localism, community entrepreneurship, community self-organization, community self-governance, institutional diversity, participatory democracy, place-based economy, bioregionalism, agriculture, energy, environment, equity, finance, governance, information, retail, taxation, human-scale, life-sustaining politics, life-sustaining economics, local ownership, capital and community,
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