The 21st Century is not working out the way many of us hoped: we witness the failure of nations and politicians to address the climate crisis, as well as social unrest in many countries over the failure of a neoliberal economic model that has neglected social equity and environmental sustainability. The Financial Times has even called for “a more sustainable and inclusive form of capitalism.”
To put these aspirations into practice, we could learn something from an entrepreneurial nation of a little over two million people, where the ratio of high wage manufacturing to Gross Domestic Product is double that of the U.S., and 16 percent higher than Germany or Japan. It has the fifth highest life expectancy on the planet (at 83.5 almost five years longer than the U.S.) and exports sophisticated machine tools to Germany and high-tech components for interplanetary space probes to NASA.
No, it’s not Denmark, but the autonomous Spanish Basque Country (Euskadi in Basque).
Over several decades Euskadi has transformed itself into one of the most internationally competitive, socially inclusive, environmentally progressive economies in the world. It is a polity that welcomes economic globalization as an opportunity, while reaffirming local community and cultural identity. It has achieved a degree of income equality higher than Denmark or the Netherlands, and a per capital GDP on the same level as Sweden. The Basque Country has reinvented its industrial metropolis, Bilbao, as a model of a post-industrial high-tech economy. Despite inheriting an energy sector heavily dependent on imported fossil fuels, since 1995 it has reduced greenhouse gas emissions by 12 percent while GDP increased 70 percent, decoupling economic growth from greenhouse gas (GHG) increases. A significant part of Euskadi’s world-class manufacturing is organized in workers’ cooperatives, such as the Mondragon Group, the world’s largest consortium of worker-owned enterprises and Spain’s tenth largest company.
The key to these Basque successes is multifaceted: social solidarity rooted in a persistent culture of national and linguistic identity, coupled with a long history of entrepreneurship and trade. Euskadi also benefits from a unique, decentralized, autonomous finance structure where most tax funds are raised, administered, and spent in its three small provinces, increasing the likelihood that social goals are actually implemented, rather than dissipating through the bureaucratic intermediaries of a larger centralized national state.