Nurturing an economy that enables human flourishing, common good and ecosystemic inter-independence
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Join us in a battle for a Good Economy!
Over the past decades, the world has been grappling with a series of global discontinuities, requiring nations, organizations, and individuals to make abrupt and radical departures from the status quo:
- Nations had to redefine their institutional policies in response to the COVID-19 pandemic, global conflicts, and disrupted supply chains.
- Enterprises had to unleash breakthrough innovations at warp speed, rebuild and reconfigure global supply chains in near-real time, and tightly manage costs as demand patterns shifted in unpredictable ways.
- Employees had to learn how to work, learn and live within the tight confines of our own homes, while others less fortunate were forced to leave their homes behind due to the collapse of political and economic systems and/or the ravages of conflict.
At the same time, the limitations of our neoliberal economic model are becoming more and more evident:
- Economic Inequality: Capitalism tends to concentrate wealth in the hands of a small percentage of the population, leaving a large portion of the workforce with stagnant wages and limited opportunities for economic advancement.
- Financial Instability: The speculative nature of financial markets and the pursuit of short-term profits at the expense of long-term stability are causing recurring financial crises that cause suffering for large swathes of the population.
- Environmental Degradation: Capitalism's focus on endless growth and profit leads to overexploitation of natural resources and ecological unsustainability.
- Job Insecurity: The ruthless pursuit of efficiency and cost-cutting measures can result in job loss, temporary employment, and a lack of social safety nets. Moreover, technological progress and exploitative economic models can further exacerbate job insecurity for many workers.
- Decline in Public Goods: Increasing commoditisation, instrumentalisation and competitive individualism can undermine the provision of public goods such as education, healthcare, and infrastructure. Private sector interests can lead to underinvestment in these essential services.
- Erosion of Democracy: The influence of powerful corporations and wealthy individuals on politics and policymaking can undermine democratic processes, exerting disproportionate control over government decisions.
- Loss of Meaningful Work: The profit motive of shareholder-centric businesses can lead to a continual devaluation of meaningful work, with workers increasingly alienated from their jobs and lacking a sense of purpose.
- Globalization: Ruthless globalization, as driven by capitalist economic systems, can exacerbate income inequality both within and between nations.
In short, the world of business is facing both intensifying rates of change and compounding degrees of complexity, and the need to answer fundamental ethical questions about what it means to be both effective and responsible, both results-oriented and human-centric. Agility or resilience cannot be enough, and neither can we simply continue as before. We believe that this unprecedented period of discontinuity and existential anxiety represents an opportunity to reimagine the transformative role that our economy can and must play in becoming a force for good in the world.
There is no denial: capitalism is in crisis. Our prevailing economic model is complicit in a host of pressing issues that demand urgent attention. This has precipitated a prevailing societal unease, denoted as "the new anxiety," accompanied by a profound disillusionment with the once-celebrated narrative of progress in modernity. An increasing number of individuals find themselves on the periphery, bereft of hope for substantive change. This pervasive discontent not only nurtures a crisis of confidence in fundamental societal institutions but also fosters the ascent of populist and autocratic regimes. We stand at a pivotal crossroads: either we commit ourselves to a better economic system or all of us will lose out.
So where are we and our economic system today? What is the problem with capitalism at present?
Economic Inequality: Capitalism tends to concentrate wealth in the hands of a small percentage of the population, leaving a large portion of the workforce with stagnant wages and limited opportunities for economic advancement. In the last thirty years, economic growth has disproportionately benefited the rich, while a growing proportion of the population is grappling with in-work poverty.
Financial Instability: The inherent speculation within financial markets, coupled with the relentless pursuit of short-term gains at the detriment of long-term stability are causing recurring financial crises that inflict suffering for large swathes of the population. Furthermore, the increasing trend of financialization not only distorts economic investment and weakens the interdependence between capital and labor but also erodes the essential long-term planning capacity of corporations, transforming them into puppets manipulated by a handful of hedge fund investors.
Environmental Degradation: Capitalism's focus on endless growth and profit leads to overexploitation of natural resources and ecological unsustainability. As early as 1970, humanity had surpassed the Earth's carrying capacity. The repercussions of our actions are evident in the alarming decline of various species, accelerating at an unprecedented rate, and playing a substantial role in driving irreversible climate change.
Job Insecurity: The one-sided pursuit of efficiency and cost-cutting measures can result in job loss, temporary employment, and a lack of social safety nets. Furthermore, the advancement of technology within exploitative economic models is poised to intensify job insecurity for numerous workers engaged in precarious "gig work arrangements" or operating as solopreneurs, lacking protection from both the state and unions.
Decline in Public Goods: Increasing commoditization, instrumentalization, and competitive individualism can undermine the provision of public goods such as education, healthcare, and infrastructure. Private sector interests may result in inadequate investment in essential services. Additionally, the outsourcing of public services to the private sector has not only depleted the inherent public-good characteristics of these services but is currently causing a significant shortage, all of which is especially felt in countries experiencing a growing aging population.
Erosion of Democracy: The influence of powerful corporations and wealthy individuals on politics and policymaking can undermine democratic processes, exerting disproportionate control over government decisions. For instance, lobbying has been on a constant rise in the last ten years, and lobby power is concentrated even more than before among large corporations. According to the economist, "There are hundreds of billionaires around the world whose riches are largely believed to derive from sectors which often feature chummy dealings with the state," and this so-called crony capitalism is also clearly on the rise.
Loss of Meaningful Work: The profit motive of shareholder-centric businesses can lead to a continual devaluation of meaningful work, with workers increasingly alienated from their jobs and lacking a sense of purpose. Numerous studies indicate that as work intensity and job demands increased, the resources derived from work—such as social support, human capital development, and opportunities to contribute to the greater good—have either stagnated or declined. The rise of digitalization has further exacerbated this issue, creating a two-tier employee system: a small, elitist "core" employment category alongside a growing contingent workforce, whose job conditions often result in dequalification rather than growth in meaningfulness.
Globalization and the Regulatory Vacuum: Ruthless globalization, as driven by capitalist economic systems, can exacerbate income inequality both within and between nations. In addition, and very pertinent, in the growing process of globalization, nation-states lose much of their political steering capacity, which creates a regulatory vacuum on many levels as stately enforcement is as much compromised as the definition of new transborder regulations which were badly needed for the global problems we are facing.
For some time, businesses have been hailed as the "only powerful actor" left in town with many associations urging them to leverage their corporate social responsibility and corporate citizenship to address our current "grand challenges." However, such calls have proven premature and, to some extent, possibly naive. Businesses themselves are entwined and caught within this self-reinforcing economic system that no longer serves our interests. Consequently, we advocate for a more direct approach, targeting the root causes and uniting in the collective effort to establish a better framework for organizing our economic activities..
Building on a Civil Economy
Learning from the past
The Civil Economy Paradigm
Antonio Genovese, an Italian economist and philosopher, charted the concept of civil economy well ahead of Adam Smith's influential 'Wealth of Nations' by a decade. This paradigm ingeniously intertwines market principles with profound social bonds, championing human dignity, reciprocity, and solidarity. Unlike capitalism, fixated on profit and individual ownership, the civil economy propels an inclusive, sustainable, and socially responsible system that places community well-being at its core. It elegantly fuses economic efficiency with ethical considerations, presenting a compelling alternative.
The allure of a civil economy lies in its contrast to capitalism's sole pursuit of economic gain, often at the expense of broader societal welfare. By embracing the ethos of social bonds, ethical considerations, and a commitment to the common good, a civil economy strives for a more balanced and socially conscious economic framework. Its superiority is evident in the potential to address pressing social and environmental issues that persist under the dominance of capitalism.
To transition from our current capitalist model to a more socially conscious economy demands systemic changes. It necessitates policies that not only incentivize ethical business practices but also place social welfare on par with economic growth. Integrating sustainability into economic strategies and fostering corporate social responsibility and fair trade practices are pivotal. Furthermore, government support for socially impactful enterprises will play a crucial role in sculpting an equitable and sustainable economic landscape, effectively addressing critical global issues.
But how exactly can we evolve and what would a reformed Capitalism look like? Join us for our new "Business for Humanity" inquiry to explore ideas and examples of what might be possible!
Business for Humanity Interviews are coming soon!
Our Growing Bucket List of Interviewees and Alternative Models
Walter Stahel - The Circular Economy
Giorgos Kallis - Degrowth Economics
David Bollier - Free Fair and Alive
Kate Raworth - Doughnut Economics
Persistent financial crises, drastic wealth inequalities, and relentless environmental strain signal a broken economic system. In "Doughnut Economics," Oxford scholar Kate Raworth outlines seven crucial flaws in mainstream economics, proposing an alternative roadmap to achieve a balance that fulfills human needs while staying within the planet's limits. This ambitious and provocative work presents a cutting-edge economic model suited for 21st-century challenges.
Clair Brown - Buddhist Economics
"Buddhist Economics, endorsed by Jeffrey Sachs, guides those seeking peace, fairness, and environmental sustainability. Developed by U.C. Berkeley economist Clair Brown, this holistic model values human interactions and advocates for an economy aligned with principles of sustainability, equity, and shared prosperity. Inspired by Buddhist ideals, it promotes mindfulness in daily activities, replacing the cycle of desire with positive collective actions for a more meaningful and happier life. Rooted in ancient wisdom, Buddhist Economics offers an enlightened approach to our modern world with lasting personal and global benefits."
Christian Felber - Economy for the Common Good
In a Common Good economy, the focus shifts from mere money accumulation to serving the collective well-being. Striving for minimal inequalities in income, wealth, and power, the system ensures sustainable consumption within ecological limits. Present and future generations benefit from equal opportunities, driven by creative business activities that foster innovative solutions for the Common Good. Various organizations collaborate intelligently, contributing to resilient structures within reasonable sizes. Dignified living is attainable for all, with meaningful work found in diverse arenas, including private businesses, publicly-owned enterprises, cooperatives, the commons, at home, and in volunteer services. In this paradigm, freedom extends beyond individual life shaping to collective design of economic, financial, and commercial structures. Personal and inner development receives equal importance, liberating people from the unhealthy compulsion to incessantly consume, accumulate capital, and pursue perpetual economic growth.
Helena Norberg-Hodge - Economics of Happiness
"Local is Our Future" by Helena Norberg-Hodge connects the threads of our social, economic, ecological, and spiritual challenges, illustrating how embracing localization can address these crises. Drawing on four decades of activism and firsthand experiences in both the global North and South, Norberg-Hodge dismantles the conventional narrative of progress tied to technological advancement and corporate growth. Instead, she advocates for economic localization, presenting a concise and compelling case. Real-world examples, often overlooked by mainstream media and distinct from Silicon Valley's techno-utopia, support Norberg-Hodge's arguments, showcasing that healthy and vibrant futures rooted in connections to nature and community are already taking shape.
Hans Visser - Islamic Finance
Vandana Shiva - Staying Alive: Women, Ecology, and Development
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