“All economic activity caters to the common welfare.” This phrase sounds like a utopian ideal. Too good to be true. Yet this is article 151 of the Bavarian constitution which legally took effect in 1946 (and is now obsolete in large parts due to the German Constitution). But there are economic alternatives. Last weekend some 130 scholars, activists and civil society came together in the Evangelische Akademie Tutzing to explore them.
Economic Alternatives to Neo-Liberalism
Within the last decades, capitalism and neo-liberal ruthless exploitation of both human and nature have taken their toll, crossing the borders of lunacy. Profit and growth paradigms have become the mantras of the powerful one percent of the world population, permeated universities and the Nobel Memorial Prize in Economic Sciences. Economic alternatives are heavily underrepresented in universities and mainstream media. This leaves many people to think that neo-liberalism and the growth paradigm are the only viable paths after the failure of communism.
Beyond Capitalism. Beyond Communism
At the same time even children in Kindergarten age understand that infinite growth is not possible on a finite planet. Within the past years, an increasing number of scholars, activists and concerned citizens have been working on alternative economic concepts that adhere to the old Bavarian ideal and find new ways beyond both capitalism and communism.
Last weekend’s conference in a beautiful castle at Lake Starnberg explored five alternative economic concepts. Each one comprises a whole philosophy and an entire world of use cases. Here is a short over-view with many links for further reading.
The idea of an economy that doesn’t declare growth their aim. But – on the contrary – attempts to actively reduce economic growth, production and consumption. Why? Because according to degrowth scholars, it is impossible to decouple the use of resources from economic growth. over consumption leads to environmental and social problems. A change in life-style and abdication from some (Western) amenities leads to a healthier world altogether. Rather than defining happiness through shopping, degrowth supporters seek to consume less and spend more time in community with friends and family, practicing arts culture. In short: Change the goal from more to better. For the well-being of all.
The debate about degrowth (re-)ignited in Germany around 2014. The idea is much older, even in the West: the German-born British economist Ernst Friedrich Schumacher wrote the book “Small is Beautiful” in 1973. The idea of degrowth is scattered into different movements. In fact, all of the following economic alternatives are related in one way or another to degrowth ideals.
- Degrowth Webportal (in German)
- Degrowth Conference in Malmö, Sweden in August 2018
- Konzeptwerk Neue Ökonomie Leipzig (in German)
- Décroissance Magazine (in French)
- Degrowth Summer School 2017 (in German)
Economy for the Common Good / Gemeinwohl-Ökonomie
The Austrian activist Christian Felber coined the term in 2010 with his book “Gemeinwohlökonomie” which translates into Economy of the Common Good. The idea: The success of a company should not (only) be determined by the profit it gains. But by how much it contributes to the common good, as already the Bavarian Constitution suggested after World War II.
Felber, who never studied economy, translated elements of good human relationships into economic rules: mutual trust, cooperation, solidarity and sharing. He argues that successful relationships is what makes people most happy. Ideally companies would then not be competitors but mutually support each other with know-how, interest-free credits and (wo)man power.
Starting in 2017, corporations in the EU have to do a non-financial reporting, according to the Directive 2014/95/EU. That means Corporate Social Responsibility reporting becomes mandatory. The economy for the common good exceeds those standards by far. Some 2200 companies already use the common good matrix for their reporting.
Common Good Links:
- Economy of the Common Good
- Das Ende der Megamaschine. The End of the megamachine. Book by Fabian Scheidler:
- The Guardian on Economy of the Common Good (January 2014)
The idea of sharing is very old. Co-operatives, for example, have a long history. Especially in Spain where a whole village, Marinaleda, has been organized as a co-operative for decades. Mondragon co-operative is the seventh largest enterprise in the country. However, sharing economy received a revival after the invention of the smart phone which makes sharing easier and more accessible across the globe. The Ouishare network works towards a collaborative economy. People share objects in the neighbourhood: tools, cars, flats and many more. It seems simple: the more you share the less goods have to be produced. This contributes to degrowth.
In reality, sharing in the modern age is not a simple solution for a better economy. Uber and AirBnB have been criticised to be worse than capitalism because they undermine long established worker rights. They not only monopolize but completely control prizes of housing and taxi fares. The platforms make a lot of money without owning any single flat or car. However, the idea and technology have been taken to the next step of co-ownership with FairBnB or Green Taxi and other platforms that foster collaborative ownership, as is the case with co-operatives and the commons-based economic approach.
- Sharable Magazine https://www.shareable.net/
- The Guardian on Marinaleda, a Spanish village organized as a co-operative
- Ouishare – Network for Collaborative Economy
- Report of OuishareFest 2017
The idea of commons is as old as humankind. Native tribes in Australia or the Americas upheld the idea of commons since the beginning of their thinking: natural resources are accessible to all members of a society, including natural materials such as air, water, and a habitable earth. It seems almost a bit ironic that within economic scientists this idea is regarded as revolutionary in the best sense or naively idealistic in the worst sense. What if we had never started to privatize and claim dominion over soil, water, air and other natural resources on our planet?
Commons, in contrast to Sharing Economy, means that many people can use a good without one person getting rich for renting it out. This is the end of property with exclusive user rights. Jeremy Rifkin, American social and economic theorist took the idea of collaborative commons to a global level and predicts the end of capitalism.
Elinor Ostrom, professor for political science at the University of Indiana, Bloomington was the first woman to receive the Nobel Memorial Prize in Economic Sciences for her research and analysis on commons. She collected countless models of the common use of meadows, forests, rivers and the like.
- Ecommony – Economy based on Commons. Book as full pdf by Friederike Habermann (in German)
- International Journal of the Commons
- Commons – für eine neue Politik jenseits von Markt und Staat. Book as full pdf by Silke Helfrich (in German)
- The Zero Marginal Cost Society. Book as full pdf by Jeremy Rifkin
- Foundation on Economic Trends founded by Jeremy Rifkin
- International Association for the Study of Commons
The British permaculturist, educator, and environmental activist Rob Hopkins was concerned about Peak Oil and Peak Everything. He wanted to create villages and urban neighbourhoods that are more resilient and less dependent on big networks. How could the transition into a world without oil dependency work? Following an experiment to answer this question he eventually applied permaculture principles in every part of his village Totnes in the South of England.
The three main permaculture principles boil down to “earth care”, “people care”, and “fair share”. With many enthusiastic participants and activists, the Transition Town movement spread across the globe. Be it a village, a small town or the neighbourhood in a large city, nowadays you can find almost anywhere people who like to know their neighbours, garden together, reclaim public spaces and agendas, foster regional economic development through local currencies, recycle waste, produce food together and many more initiatives. Many Transition Town activists create their own jobs which allow them to sustain their living.
Even More Economic Alternatives
Although I like and support the Transition Town movement I don’t think it really is an economic model. For me it is a holistic approach that touches all areas of life. I would have preferred to include other important economic concepts like gift economy (not to be confused with living without money) or the unconditional basic income. For both there are initiatives in Germany like ecobasa or Mein Grundeinkommen.
Besides these economic alternatives, we got an introduction into the history of colonialism and Europe’s exploitation over the rest of the world – Economic history from the perspective of the Global South. The era of domination reaches as far back as Europe’s knowledge of other continents. In 1493, only one year after Columbus reached the Americas, the pope allowed Spain and Portugal to divide the world among them – the land and all living beings in it, including human beings, became property of the colonizers.
Among the facilitators were some activists who are not scared to face the police and temporary custody if it is necessary to protect the environment. I am very happy to see that an educational institution that belongs to the church sets a strong statement and a very positive signal for our future by cooperating with those that wholeheartedly practice civil disobedience.
The 130 conference participants and facilitators formed an interesting mix of people of all ages and walks of life: The youngest were high school students; the oldest have long been retired. Facilitators’ backgrounds stretched from the academic world to grass root environmental and social activists.
This was the first event in the alternatives world at which I met a significant number of older people. Looking at other events around the great turning like the Ecovillage Design Education Course, the Ouishare Fest, the Permaculture Design Course, the Klimacamp or Hambacher Forst: the majority of participants was between 20 and 40 years old with some exceptions up and down. Having more elderly people on board created an interesting and valuable dynamic.
Together Towards a New Economy
Particularly some of the men who had long been retired liked to see themselves as experts although they were clearly not. Some tried to confront and challenge the authority of young (female) workshop facilitators in exaggerated and even aggressive ways. Other elderly, however, were very open and came with an attitude to learn from the young generation. Some drew from their experiences in management positions of big corporations to contribute to improve the future of the planet. The more we all work together towards the great turning, the faster and the better it will come into reality. The Evangelische Akademie Tutzing contributed to the achievement of that goal through connecting and educating people at the conference on alternative economic models.
The world keeps getting better!
What other economic models do you know that have the potential to leave both communism and capitalism behind? Please post them below!