Economy week came with a full load of deep insights and amazing aha-moments about old and new economic paradigms. We got an overview of the history of production from manufacturers to mass production, different schools of thought like John M. Keynes and Milton Friedman and the current distribution of wealth. We dismantled the concepts of money as a currency, free markets, the role of consumption in our current system and its limits on a planet with finite resources.
The video Wealth Inequality in America summarizes very nicely how people think wealth should be distribution in the United States and how they think it actually is distributed. Even if people think they made a pessimistic guess about the latter question this video shows the reality is even a lot more gloomy than we imagine! Really eye-opening!
Change the Game from More to Better
The small videos The Story of Stuff sums up in some entertaining 20 minutes why our consumption-based economic system is not a long-term solution on a finite planet. The Story of Solutions gives a descisive impulse that will lead towards a different economic system that is more healthy for both human and nature: Change the goal from “more” to “better”.
In the news, I constantly read that politicians legitimate their decisions with reference to “economic necessities”. However, the current economic system is not carved in stone. On the contrary: Despite the many figures used to describe it, economy is not a calculable or predictable entity. It is not even really a system because it cannot really be controlled or managed as we might think. The economic “system” is very much based on an intangible and extremely fragile value, namely trust! That starts with the trust in the continuation of the system. If it didn’t continue, neither currencies nor credits had any meaning at all.
Alternative Economy in Auroville and beyond
We got an overview of the very different economic systems in diverse ecovillages and intentional communities around the globe. They range from a certain number of work-hours a week to certain financial contributions. Auroville units give 30% of their profit to the community to maintain public infrastructure. Auroville’s roughly 2500 inhabitants employ around 5000 people from the local surrounding villages. Often they get the Indian minimum wage and the minimum number of holidays. One unit leader stressed that women and men receive the same remuneration.
In Auroville, we visited the Pour Tous Distribution Center (PTDC). This is not an ordinary grocery shop but a co-operative with the aim of providing for basic needs of Aurovilians. Interesting for me to see that this includes cookies as well as products from brands I try to avoid for political and ecological reasons: Nestlé and Coca-Cola. Aurovilians don’t pay directly at the cashier but contribute with a self-chosen monthly amount which you are asked to adapt if you exceed it and can afford to pay more.
Eco-femme, an Auroville-based company uses a hybrid business model. They sell eco-friendly female hygiene products to finance their NGO work which includes educating children in schools about topics related to menstruation and the cycle.
A Different Economy is Possible
There are other possibilities for economic ideas like Gift Economy, Sharing Economy, Collective/Collaborative Economy, Buddhist Economy and Peer Economy. People around the globe are experimenting with alternative currencies. To me, it seems that more and more people explore them.
- The fundamental paradigms of our current economic system are ownership and private property! That includes land, resources, patents and others.
- Change from a property-based system is on its way in the open-source and co-creation movements.
- Some etymology:
- Money: derives from name of Greek goddess, something that has to be monitored
- Economy: derives from the Greek word for “household”.
- Entrepreneur: was originally somebody who runs a theatre show and takes care of the theatre.
- Bank: derives from a word meaning “place”
- Finance and Management both refer to controlling something and derive from horse riding / horse management
- The basis for today’s (Western) economic system is ownership and private property.
- John Maynard Keynes is the father of consumerism. However, he warned of using consumerism as a means of growth. He said that his economic system would be good for only around 100 years. After that, people should come back to “real” values:
“When the importance of wealth is no longer of high social importance there will be great changes in the code of morals. The love of money as a possession will be recognized for what it is, a somewhat disgusting morbidity, one of those semi–criminal, semi–pathological propensities which one hands over with a shudder to the specialist in the mental disease.
But beware! The time for all this is not yet. For at least a hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight…” (John M. Keynes)
- Capitalism and Communism are the two big economic structures we know today. None occurs in reality in its purest form. It is always a mix of both.
- The Capitalist “System” is not really a system but a sum of individual decisions. This can create a lot of friction and crisis.
- Free market economy is an illusion because prices regulate themselves, based on availability and demand.
- Scarcity provokes consumerism.
- Economy is like a fire: a good servant but a bad master.
- Standardization in production started with the weapons industry. Before items were hand made and if a part was broken it could not easily be exchanged.
- The first documented serious financial crisis was the Tulip crisis in the Netherlands in the mid-1600s. Tulip prices skyrocketed and then dropped dramatically.
- Banks pay a lot of money to store the gold in their vaults even though the value of money does not relate to gold anymore since Bretton Woods in the 1970s.
- We learned about Gandhian Economics – thoughts on alternative economics as coined by the Indian Economist J. C. Kumarappa. He says Western economic systems are based on what he calls “the multiplication of wants” – an idea I can relate to after working in the marketing department of a big corporation. Gandhian Economics propagate an attitude that serves to the fulfillment of “needs” – including the need of meaning and community.
- Auroville’s vision of a future work ethic states that people will not work anymore to make money but to express themselves.
- The educational system we have today does not prepare students for the future world in which change and evolvement will take place continuously. Future employees will have to be self-confident, creative and courageous.
- When designing the “ideal” system it is not difficult to come up with the system – but to maintain it.
Read about other weeks of the Ecovillage Design Education Course in Auroville, India.
Photo Impressions of Economy Week