This is a timeline of the science fictional Great Retrofit world, created as an output of the Science Fiction Economics Residency 2024.
Back to the Great Retrofit world’s landing page
It’s 2050. The Messina Community Foundation’s partial revolution is winning. More companies and social cooperatives are being started, creating and to some extent spreading wealth. However, trouble is brewing. To understand the situation, it is useful to look at how we got to 2050 the way we did. Here is a chronology, looking back.
The early days: 2027-2033
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In 2027, the Foundation makes a breakthrough. It finds a way to organize some construction workers, many of them with little formal education but good at manual labour, into a new cooperative that specializes in retrofitting the existing building stock to make it more resource-efficient. This new company is christened Priu, a Sicilian word meaning “joy, satisfaction”.
In line with the European Green Deal and national policies, this is a vast and fairly secure market. Moreover, the Foundation’s well-honed skills in financial engineering have succeeded into securing working capital for this new coop. They use a mix of public, private and local finance to overcome the liquidity constraint.
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Priu essentially transforms under-utilized manual labour into monetizable emissions reduction. The retrofitted building are cheaper to heat and cool, and associate to better health outcomes leading to lower health care costs and higher productivity and happiness. This improvement is also captured in the increase of the capital value of retrofitted buildings. The young company grows quite quickly, well into the hundreds of cooperators. Along the way, it finds itself acquiring the property of some of the retrofitted units (for example, they accepted payment in kind by owners of multiple units or buildings). Poorer household are not evicted, but allowed to stay for an affordable rent. This practice creates a de facto social housing program. The workers-owners of Priu are encouraged to move in some of the units. Cooperative ownership of units means that fewer of these renovated units can be resold on the market, therefore dampening the speculation and gentrification dynamics. The more radical (and relatively affluent) citizens of Messina involve Priu into projects of radical renovation of former industrial buildings to make Islas, partially autonomous cohousing projects that produce part of their own energy and even food.
Messina as a Mission Economy: 2034-2045
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In 2034, as Priu’s success grows, the City Hall, supported by the Foundation, launches a new policy: the Framework Programme for an Improved and Higher-efficiency Residential Building Stock towards an Eco-friendly City of Solidarity, commonly known as the Great Retrofit. The Great Retrofit is a “local moonshot”: its goal is to retrofit 60,000 housing units (about 60% of the city’s housing stocks) in ten years. This is estimated to reduce the city’s overall CO2 emissions by about 15%. With this, Messina becomes a mission economy in the Mazzucato sense. Meanwhile, the EU-wide scramble to retrofit is driving the prices of raw materials up. Priu and the Fondazione, threatened by the increase, react by upstream vertical integration, trying to spin off companies to be their suppliers. The economy becomes more circular : waste from other sectors can sometimes (after processing) function as secondary raw materials in construction, especially in non-load bearing functions like insulation. This makes the Great Retrofit economy more high-tech, research-intensive and prosperous.
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The new affluence funds multiple objectives, consistently with the Quintuple Bottom Line approach of the Foundation (people, planet, surplus, beauty, truth). Famous architects and artists flock to Messina to celebrate the new pathway to prosperity. Are the Great Retrofit’s leaders and inspirers becoming complacent or arrogant?
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A Georgist tax on land ownership (not buildings) was imposed. This generated further tension in Great Retrofit Messina.
The crisis (?) 2045- present time
Can we do all of that through a catastrophic event? Can it accommodate a wave of climate refugees? A global financial crisis? How robust, really, is our model?
Questions asked during the visioning session
Troubleshooting
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How does the subsidy regime required survive the upcoming political shift to the right in the EU?
Some environmental and climate policies are baked into law, and are hard to reverse. A right-wing Commission is looking at ten-fifteen years before it replaces key personnel and learns the ropes to dismantle that.
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How do you avoid being outcompeted by private sector companies, especially given that coops have no incentives to grow?
Private companies are woefully ineffective in this policy (this is also the historical truth of the Italian 110% tax credit on retrofits, that failed). They do what’s profitable for them, regardless of the stated objectives of the policy. In this case, they were (and continue to be) good at retrofitting single-standing houses for the rich and the upper middle class. The Priu coop is better at retrofitting the large buildings where (1) most people live, (2) most emissions are generated, (3) the cost per square meter of retrofitting is lowest. So they are more efficient because they do the job that the collectivity is paying for (via taxes) instead of what is good for their (singular) bottom line.
It is false that coops have no incentive to grow (though Friedman believed it). In fact we see stable, linear growth caused by needs from new members. In the Great Retrofit world, our main econ sci-fi element is the creation of a new economic actor, a “mutant”: quintuple bottom line companies, which we get to know through the story of the leaders and workers in Priu. Priu wants to grow, because it can hire more people (doing well on the “people” bottom line), and fund art and beauty (on the “beauty” bottom line, etc.). It just does not want to grow only on the surplus side. It does want to grow its surplus, unless it clashes with other dimensions of its bottom line: for example, real-world worker coops do not fire their members to offshore production. Quintuple bottom line coops like Priu would also refrain from growing if that would impact planet, beauty or truth.
The constraint to growth in real-world coops, and to Priu in the Great Retrofit world, is financial. Investors are reluctant to invest in cooperatives, because, no matter how much they invest, they can never buy decision-making power. In this world, finance is a high priority for the architects of the Great Retrofit. The smart housing islas are funded by a cooperative bank, and in turn become cooperative-like structures that enable financing.
Fraud happened in the (real) 110% story. Priu itself has really no incentive to commit fraud, because of the reputational consequences associated to the dense web of relationship between actors.
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How are you not reinforcing the current economic patterns? What are the counterideologies?
We are introducing a new type of economic actor, quintuple bottom line companies. Everything else is the same. Their very success crystallizes an ideology (similar to what happened with the rise of the merchant class in the Renaissance, or the Green New Deal in Cory Doctorow’s The Lost Cause), and likely produces a counterpush. Some people will find themselves on the losing side, and they will resist. This is an interesting generator of narrative tension.
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How do you get the Georgist Land tax passed?
This is a tough one. Working on it.
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Are we assuming the same structure of property rights?
This world does not need to invent any new legal institution. The extant legal palette of property rights includes a lot of shared forms of ownerships other than freehold, for example community land trust, cooperative ownership of businesses etc. These shared forms already exist in our society, but become more important in the Great Retrofit.
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What is the impact on the cost of materials?
Raw materials prices increase because of standard demand inflation dynamics. Priu and the Fondazione, threatened by the increase, react by upstream vertical integration, trying to create their own suppliers. They try to go circular : waste from other sectors can sometimes (after processing) function as secondary raw materials in construction, especially in non-load bearing functions like insulation. This makes the Great Retrofit economy more high-tech, research-intensive and prosperous.
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What about things other than housing and insulation?
As Priu becomes more successful, the City Hall and the Fondazione conceive the idea of a “local moonshot” on building retrofitting. This transforms the local economy into a mission economy à la Mazzucato. As challenges get solved, the economy acquires new capabilities and transforms. See the main narrative arc.
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What’s the added cost of making something beautiful? How does Priu measure the quintuple bottom line without “dying by measurement”?
Policies in the Great Retrofit scene are proposed and peer-reviewed, just like it happens now in the Foundation. Results are presented in multidimensional terms (there is no conversion factor that tells you how many tonnes of CO2 a job is, etc.). An argument for one policy to be better than another is made in terms of Pareto dominance: “see, solution A delivers more people being pulled out slums than solution B, and it offers more choice to beneficiaries, and it is more harmonious to look at. So A Pareto-dominates B."
In practice, democratic governance also factors in. An argument can be made that democratic debate is evaluation to a certain extent. 5-BL companies do it with inevitably political discussion; options can be compared to one another, and sometimes ranked. This is good enough for deciding: there is some investment in measuring the measurable, but not in trying to create aggregate indicators.
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How does this create new horizons for imagination beyond the local story?
What about relations between Messina and the rest of Sicily?Messina is highly connected to the rest of Sicily and shares the Retrofitting model and financing tools so that the idea spreads and cities and regions all over Sicily and Italy and Europe. The refugees who spark this movement also spread their experiments outside Sicily and back to their homes.*
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Where do the refugees come from?
Largely West Africa.