Economy for the common good
business for humanity
with Christian Felber
Join us for an exclusive interview with Christian Felber, visionary founder of the Economy for the Common Good (ECG)! In this episode, we'll explore how the ECG offers a transformative framework for economic and social change, grounded in democratic values, sustainability, and solidarity. We'll discover how collaborative action and institutional innovation can reshape the economy to serve the well-being of all individuals and communities, fostering a more just, equitable, and sustainable world. We'll discuss the intricacies of political and economic institutions needed to transform a capitalistic incentive system focused on growth and individual profit, including Christian's concept of a cooperative market economy and the radical reformation of finance and banking. The ECG's approach is not only distinguished by its broad theoretical foundations but also by its proven operational success. With over 4500 members worldwide, this movement stands as a beacon of hope for positive change on a global scale! Don't miss a memorable conversation that promises new insights and inspiration!
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Introduction to the inquiry
Economy for the common good
The Economy for the Common Good (ECG) offers a visionary framework for economic and social transformation, rooted in democratic values, sustainability, and solidarity. Through collaborative action and institutional innovation, the ECG aims to create an economy that serves the well-being of all individuals and communities, fostering a more just, equitable, and sustainable world.
Key Issues
The Economy for the Common Good seeks to address a multitude of interconnected crises inherent in the current capitalistic market economy. These crises include concentration of power, inequality, social polarization and fear, ecological destruction, and erosion of values and democracy. Capitalism, according to the ECG, systematically misdirects creativity and investments, serving society's elites rather than the popular "sovereign". At the heart of the problem lies a confusion between means and ends, where profit and competition are prioritized over societal well-being and meaningful lives. The ECG aims to realign business values with those of society and embed constitutional goals in business practices.
Core Values and Beliefs
The Economy for the Common Good (ECG) is grounded in a set of common constitutional values that shape its ethos and direction. These values include dignity, solidarity, sustainability, justice, and democracy. Dignity is regarded as the highest good, emphasizing the inherent worth and equality of all individuals. Additionally, the ECG emphasizes interpersonal values such as trust, empathy, appreciation, cooperation, and sharing. The model recognises that successful relationships and collaboration are essential for human happiness and motivation. The ECG aims to re-embed economic practices into the planetary ecosphere and ensure that the economy serves the common good while preserving individual freedoms and rights.
Political Institutions
The Economy for the Common Good (ECG) proposes a comprehensive approach to political institutions aimed at fostering democratic participation and prioritizing the common good. The ECG envisions a three-step direct democracy involving representative, direct, and participative democracy, with a focus on cooperative procedures rather than factional competition and a bottom-up democratic process to counteract the influence of elites and safeguard societal interests. Economic conventions at the municipal, regional, and national levels serve as forums for democratic deliberation and decision-making. These conventions facilitate discussions on specific issues, such as democracy, economy, education, public services, and media, leading to the evolution of a democratic economic order. The Common Good Balance Sheet serves as a central political incentive tool, measuring enterprises' contributions to the common good. Seventeen Common Good indicators assess various aspects of a company's operations, and these indicators are subject to democratic discussion and decision-making processes to ensure relevance and adaptability over time. These balance sheets are legally binding, publicly accessible, and subject to external audit to ensure transparency and accountability. Additionally, the ECG advocates for the removal of systematic drivers of growth. Key regulatory measures include scaling corporate profit taxes according to Common Good Balance Sheet results, and inheritance tax reforms to prevent wealth accumulation. It suggests a mixture of private, public, and communal property rights, with restrictions to prevent excessive inequality. Additionally, the ECG proposes global regulation to ensure fair trade and sustainable resource management.
Economic Institutions
The ECG envisions an economic order where the pursuit of the common good is the overarching goal of business. It promotes a cooperative market economy where competition is subordinate to cooperation, and private enterprises coexist with "democratic commons" such as energy supply companies and schools. This reorientation entails a reversal of the prevailing incentive structure, prioritizing cooperation and the common good over profit and competition. Key institutional changes include replacing traditional metrics of economic success with indicators focused on non-monetary values such as satisfaction of needs, quality of life, and the common good. A Common Good Product would replace GDP, whereas the ethical return on investment would displace financial return as the primary parameter of economic success. Enterprises are encouraged to to supplement their financial balance sheet with a Common Good Balance Sheet, which assesses their social responsibility, ecological impact, democratic practices, and solidarity - for example, how cooperative they are with other companies, whether their products and services satisfy human needs, and how humane their working conditions are and whether income is fairly distributed. Enterprises with favorable Common Good Balance Sheet results receive legal advantages, such as tax incentives and preferential treatment in public procurement.
Finance
The ECG proposes a radical transformation of finance and banking, forbidding to "make money from money". Financial markets would cease to exist, with money as credit becoming a public good. Regional common good stock markets would replace central capitalistic ones, financing enterprises without trading them. The Democratic Bank would offer loans to common good-qualified companies at fixed rates just above cost to avoid pressure on economic growth, with democratically elected supervisory boards ensuring accountability. Investment banks would be abolished, and other banks would operate in non-profit-oriented forms. The government and parliament would have no access to the Democratic Bank, which would be transparently controlled by the sovereign people. Income would be earned through work rather than capital, with limitations on use of investment and . Commodity prices would be fixed democratically, and hostile takeovers would be forbidden. A global "globo" currency would be introduced to support international Common Good trade zones.
Organisations
Important ECG objectives are to promote the democratization of enterprises, a fairer distribution of company results and employee ownership schemes. It advocates, among many other measures, for restricted reserves from profit and a gradual annual decrease in profits exclusively benefiting founders in favor of broader ownership distribution among employees. It also prohibits dividend payouts to non-working proprietors and advocates for statutory maximum and minimum wages, with income limits set as a small multiple of minimum wages. Additionally, the ECG advocates for reducing regular working hours and introduces periods of regular leave to foster appreciation for non-work-related activities. It also promotes shared crisis commissions to address economic downturns, with companies producing lowest common good to be closed first.
Change and Transformation Approach
The ECG change approach involves several components. Firstly, local chapters are established globally to serve as the backbone of the movement, implementing ECG principles at the grassroots level. Additionally, the ECG movement utilizes various channels, including expert teams, public speakers, and consumer engagement, to promote its principles and drive change. At the international level, associations and a delegates' assembly facilitate coordination and collaboration among supporters. Overall, the ECG strategy aims to leverage political business and consumer engagement to achieve widespread adoption and impact.
example questions for our exploratory Q&A
- How does the ECG integrate individual and common interests?
- What were the reasons behind the failure of the Common Good Bank?
- How successful was networking across different networks?
- What progress have Common Good municipalities made?
- What is the typical profile of companies engaging with ECG principles?
- How has the growth of the ECG movement evolved, and what obstacles have been encountered, particularly in the market?
✿ ABOUT CHRISTIAN FELBER
Christian Felber has enjoyed a distinguished academic career, teaching at various renowned universities since 2008, including the Vienna University of Economics and Business, University of Graz, and University of Applied Arts in Vienna, earning a teaching prize from the University of Graz in 2013 and becoming a Senior Fellow at the Institute for Advanced Sustainability Studies (IASS) in Potsdam in 2018.
Christian is perhaps best known for his activism and political efforts, co-founding organizations like Attac Austria in 2000 and the Movement Foundation Austria in 2009, which supported initiatives like the Democratic Bank and Economy for the Common Good.
Christian is a prolific author with 15 books to his name, including bestsellers translated into 15 languages. His notable works include "This is Not Economy" (2019), "Economy for the Common Good" (2014, revised edition), and "Free Trade Agreement TTIP" (2014). He regularly contributes to German-speaking quality newspapers and media.
The Resource Kit to launch your journey
our recommended reading
Change Everything - Creating an Economy for the Common Good By Christian Felber
‘Change Everything - Creating an Economy for the Common Good’ provides readers with the fundamentals for Christian Fleber's work on an alternative economic system. It is the perfect introduction to his theory, which he expands on in subsequent books, for example on global trade.
summary
"Change Everything: Creating an Economy for the Common Good" by Christian Felber offers a radical, thought-provoking reimagining of our economic system. Felber challenges the traditional capitalist model, advocating for an economy that prioritizes the common good over individual profit. The economic paradigm discussed and elaborated makes this book an interesting read for a wide audience, including economists, politicians, students, and managers, for several reasons:
1. Innovative Economic Model: Felber introduces the concept of the "Economy for the Common Good," a system where businesses operate not just for profit, but to contribute positively to society. This model focuses on cooperation, sustainability, justice, and democracy.
2. Comprehensive Analysis: The book provides a thorough critique of the current economic system, identifying its shortcomings in areas like social inequality, environmental degradation, and loss of democratic control.
3. Practical Framework: Felber goes beyond theory by presenting a practical framework for implementing this new economic model. He introduces tools like the Common Good Balance Sheet to measure a company’s success based on its social and ecological impact, rather than just financial profit.
4. Relevance to Diverse Fields: The book’s themes are pertinent to a wide range of fields. Economists can explore new models of measuring economic success; politicians can find insights into policy-making for a more equitable society; students gain exposure to alternative economic theories; and managers can learn about sustainable business practices.
5. Democratic Participation: Felber emphasizes the role of democratic processes in shaping the economy, encouraging citizen participation in defining and pursuing the common good.
6. Global Perspective: The book includes international examples and case studies, making it relevant on a global scale.
7. Ethical Considerations: The book delves into the ethical implications of our economic choices, challenging readers to consider the broader impact of business decisions on society and the environment.
"Change Everything" is not just a critique of existing systems but a hopeful and empowering guide towards a more equitable and sustainable future, making it a valuable read for anyone interested in the intersection of economics, ethics, and social justice.
Live video recording: Introduction, Presentation, Q&A
Presentation for download
Explanations, artefacts and references from this episode
Practitioners' Forum
KEY INSIGHTS FROM Practitioners' Forum
Here you can find the most memorable insights, comments, questions from you, the community. Simply select from the drop down menu on the right -->
1. What ARE YOUR KEY TAKEAWAYS?
- John Knights, LeaderShape Global: My main concern in general is those organisations attracted to ECG are led by people who care for the greater good - which is great - BUT most powerful organisations are led by people who are greedy and high ego, and our whole system is geared to educate people to think in this way and then select and promote people with these characteristics to positions of power.
- Andre Young: The price of tomorrow is indeed Economics for the Common Good.
- Juli Thomas, Human Business Labs GmbH : Great concept. However, just the thought that some politicians may try to preach and implement some of the recommendations scares the hack out of me. Why? Because (most) politicians are driven by short-term goals and power struggles. Hence, the question is how to nurture transformations from within the society. States can and ought to provide and secure the necessary institutions.
- Frase Musson : The participatory narrative requires a quite sophisticated individual to participate. How does ECG encourage or mandate participation, which in elections has been reducing to low levels due to disillusionment and a lack of belief that citizens can change the system?
- Natalia Blagoeva : Thanks a lot! Great value in Christian's work!
- Remko van der Pluijm : It is just an interesting example to prove the point that a broader definition of value in economy is already incorporated within our societies
2. HOW COULD WE HELP CHRISTIAN REALISE HIS VISION?
- Juli Thomas, Human Business Labs GmbH : Personally I found the presentation and discussion more or less common sense. The challenge is that it is not common practice. The question is how can we eliminate this gap. My solution: let people EXPERIENCE the common sense values and principles in project settings and become ambassadors of transformation from within.
- Wilma ,Being At The Cottage, : In tandem with ECG understanding how we can walk from an inner path and discover more about our human potential.
3. WHAT WILL YOU DO DIFFERENTLY IN YOU OWN ROLE?
- John Knights, LeaderShape Global: I will certainly investigate our business becoming an ECG member.
4. Questions from the community
- Why would the ECG Matrix in its current form prevent goodwashing? (it is not yet binding nor linked to the envisaged incentives) How to avoid the TBL problems (measuring, reporting, greenwash)?
Christian: Now, because no transnational corporation has dared to implement it due to the risk of getting a negative result. There is a media article related to this effect/topic: https://www.sueddeutsche.de/wirtschaft/hugo-boss-hoheloehne-als-risiko-1.3965749
But our main argument is when such an instrument becomes legally binding. - Why would this not become a surveillance nightmare?
Christian: Is the existing duty to issue a financial statement a surveillance nightmare? If not, why should a similar reporting duty for other issues turn into a such? We
are talking about transparency. - How to overcome market coordination and motivation inefficiencies?
Christian: More complete information leads to better informed decisions lead to higher systemic efficiency:) More importantly, if there will one day be no gigantic corporations, market players will have a lower potential to obscure, hide, manipulate
and betray. The potential will not disappear, but become lower. Finally, if people can live their calling in the economy, motivation rises; same in a game setting of structural cooperation (instead of structural competition or better: counter-petition). - Can this only exist within a completely different system, or can we apply
some of the institutional interventions in the current system (as “safe
havens”)?
Christian: We have more than 1000 organizations applying the Common Good Balance Sheet, several dozens of Common Good Municipalities, one Common Good
Bank Account, and so forth: https://www.ecogood.org/10-prototypes-for-acommon-
good-economy/ - What are specific changes required within organisations?
Christian: Please take a look at the – free accessible – manual: https://www.ecogood.org/apply-ecg/companies/ - What are the experiences of and with ECG organisations – what is most challenging
and what is most insightful?
Christian: The most challenging is that some corporate or business leaders disagree
with the ethical goal, e. g. to limit the concentration of power or inequality. In
this case, companies can chose to not “improve” in this aspect and focus on
others. Their disadvantage is that the score is lower compared to a company
with a lower degree of inequality or property concentration. The good practices
are listed here: https://www.ecogood.org/good-practices/ - Why would Bismarckian pension system (continue to) work?
Christian: If you mean a modern, solidary public pension system based on intergenerational contract: because productivity and per-capita income are higher then ever before, and, consequently, every person can mathematically have a
higher income than ever before. It is not a question of financing, but a matter
of distribution. - Christian please comment on TRUST indexes to the phase change of these
systemic institutional overhaul that ECG proposes. Share your thoughts on
the overall modernity of society.
Christian: General trust in society, social cohesion and the feeling of social belonging,
security and embeddedness are basic needs. They do not figure among financial
goals. They should figure among “economic” goals in the new meaning:
the economy is not disassociated from society, but an auxiliary system to allow
societies to thrive and flourish. This includes the satisfaction of basic
needs of all humans as well as the objectives mentioned above. These have
to be included in the management dashboards of both, individual organizations,
and the national economy. - Are the linear economic model and the market paradigm too limiting to fit
the ECG concept? From a complexity perspective I would say, yes!
Christian: I would agree with a linear economic model idea, but not with “markets”.
ECG’s goal is a) to transform capitalistic markets into ethical markets as b)
only one stage amongst others of the economy. Other stages are commons,
households, public goods and others. - How would this be made relevant for public limited companies, i.e. the companies
that were brought to life with profit maximization goals?
Christian: First, we ought to avoid to bring to life organizations with a profit maximization goal, this is pure “chrematistiké” or “capitalism” in its literal meaning.
ECG offers an Ecogood Business Canvas to help start sustainable / responsible
/ common good oriented companies: https://www.ecogood.org/start-ups/
Second, we could change stock market rules in the sense that only companies
with a minimum score in the Common Good Balance Sheet can be listed.
Third, we also have some regulatory proposals to curb profit maximization
practices that skyrocket inequality and lead to excessive power concentration.
For instance, it can be discussed to stop the trading of shares and shift to an
invest-divest-regime only. The exercise is to find a sustainable, humane, participatory, solidary, cooperative, and resilient “economy” beyond capitalism
and socialism. - What makes you confident that hyper individualistic, hedonistic consumermore-
than-citizens would agree to how you define the common good? Who
is the target? How will it expand beyond the “converted”?
Christian: Why should we first talk to those who resist most? We talk to those who invite us and are open to discussion, and we try to build in the longer term a) democratic majorities and b) more democratic processes. A first voting on the ECG
was held in a Spanish municipality: 90 percent voted in favour. A relevant voting
ocurred in the European Economic and Social Committee: 86 percent welcomed
its own-initiative opinion on our model that recommends to include the
ECG model and principles in the legal framework of the EU and its member
states: https://www.eesc.europa.eu/our-work/opinions-information-reports/
opinions/economy-common-good - How can we walk from an inner path and discover more from our human potential?
Christian: Listening to our hearts. In nature. In silence. Doing creative or artistic work.
Listening ever deeper to our bodies. Letting body and mind become one. (I am a dancer.) Listening to our sensations, feelings and deepest needs. Using our finest antennas inwards and outwards. I wrote a small book in the «inner voice» (in German and Spanish): https://christian-felber.at/buecher/ - How successful was/is the project? What was the “tangible” impact?
Christian: We are evolving slowly and organically bottom-up, starting within:) individuals, companies, municipalities, schools, and universities. There are thousands
of tiny impacts, but if the parts of the ecosystem connect with one another
(including other future-fit economic practices and models from B Corps to
Doughnut, from permaculture to CSX, from circular practices to sustainable
finance), the synergies will grow until one day possibly reaching a tipping
point where the whole system and paradigm shifts into a sustainable a humane
economy. - Why did common good bank fail in 2018?
Christian: Austria’s Financial Market Supervision Authority considered our application
(not for a bank, only for a payment institute, means an entity that would offer, in a first step, only current accounts), as incomplete. Our application had 500 pages. We estimated that an increase to 1.500 pages would have been necessary to be “complete”. That would have required two more years of work and several more millions of investment. And then, only the next step would have been achieved: the evaluation of our business model. As we had received signals that our initiative was not welcomed by the established banks, we did not see a high probability that our BC would have been approved. Then, all the work and investment would have been in vain. The fact that it took the authority 9 months to communicate us that our application was incomplete and the additional fact that they did not even tell us voluntarily – we had to go to court to get this information! - did not increase our motivation to present a complete application. Consequently, we developed a new strategy in 2018 that started successfully in 2019: We are partnering with a bank on a first “Common Good Account” (our trade mark): https://www.gemeinwohlkonto.at/, we bought a crowdfunding platform which is funding sustainable projects with a volume up to 200.000 euros: https://www.gemeinwohlprojekte.at/crowdfunding-fuer-gemeinwohl/, and we have an academy that is offering courses on (ethical) financial education. We = the Vienna- based Cooperative for the Common Good with currently 3.700 cooperatives and two positive annual statements in 2021 and 2022: https://www.gemeinwohl.coop/ - What progress have the ECG municipalities made, across economic and
democratic changes? How much success in lobbying for taxation etc?
Christian: Most of them are in their beginnings: Best practices are a stop of soil sealing in Kirchanschöring (Germany), a reverse of rural exodus of young people in
Miranda de Azán and a first local Common Good Index in Guarromán (both
Spain). Münster (Germany) is considering to use ECG criteria for its future
public procurement policies. - The participatory narrative requires a quite sophisticated individual to participate.
How does ECG encourage or mandate participation, which in elections has been reducing to low levels due to disillusionment and a lack of belief that citizens can change the system?
Christian: As a political scientist and advocate of direct democracy, and a supporter of the models of Switzerland and Uruguay, my view is that if people get a true choice meaning that they can decide on content, they would engage with higher motivation and take better decisions. - Christian, have you considered the causality of change to bring about this common good economics and common good business and built a transformation roadmap?
Christian: We do not have a blueprint for a linear strategy, but touch as many accupuncture points as possible (see our good practices and real-life-prototypes) on the levels of a) economic science and education, b) economic policy and c) economic
practices. Maybe, our holistic approach is our actual strategy. - With 10x (salary) how would the risk of an exodus of talent to more profit
driven companies or countries be mitigated?
Christian: Humans who measure their worth and life’s quality primarily in monetary
units, are free to move to the place where they can earn most. In return, other
humans who value nature, inner wealth, thriving relationships and communities,
trust, social cohesion, strong fundamental rights and peace, will join this country. It would be a net win for a society that dares. - Democracy consistently fails when citizens are less educated and highly
conditioned by prevailing cultural and social forces, irrespective of constitutional
descriptions - how does ECG account for that? Does the list of 25
countries or research consist of so-called “third-world countries”?
Christian: Our experience is that people, where ever asked in the world, what the really really need, and what they appreciate most, and what is truly holy in their lifes, use to deliver very similar or even identical answers. ECG was made in the EU and is meant for the EU. If humans in other regions feel addressed by our proposal, we deliver them all the tools and support we can. But it is up to them to build in their countries, in strong or weak democracies, and diverse cultures a live-supporting economy. ECG is inspired by wisdom and timeless values from all over the globe, including indigenous traditions. This seems to be recognized and acknowledged – so we explain requests from all over the world, including now South America, Japan, and South Africa, recently.
Our meta inquiry
In this section, our aim is to expand our horizons by engaging in critical reflection on each paradigm within the context of fundamental philosophical, political or economic questions. Through comparative analysis across various approaches we try to glean deeper insights that will enrich our journey forward.
The meta inquiry
Let's step into the role of "transformation scientists" and examine the ECG model (slide 1) from a broader perspective, attempting to categorize it within existing frameworks and seeking out its specificities to extract deeper insights.
How can we categorise the ECG as a political framework?
- Overview of Economic Flows (slide 2):The graphic represents familiar economic flows inherent in capitalism. It illustrates resource allocation to businesses, production of goods and services, profit generation, and interactions between the private sector, government, and financial institutions. Green arrows signify maximized flows, while red denotes minimized costs.
- Crises of Capitalism (slide 3):Our discussion aims to address issues stemming from these typical flows. Drawing from Paul Adler's "The 99% Economy," we can identify crises of capitalism, distinguishing between primary and secondary effects. The secondary effects pose significant long-term challenges.
- Our categorisation of the ECG (slide 4 and 5): In our analysis (Christian challenges this in the video), the ECG exhibits patterns typical of socialist ideologies. Socialism emphasizes collective ownership of the means of production, equitable distribution of wealth, and central planning of the economy to achieve social justice and eliminate class disparities. As we show in the picture, it often features restrictions on production and financial flows, changes in ownership via nationalization or worker cooperatives, and active wealth redistribution through measures like inheritance tax. These are all measures proposed in the ECG. Additionally, the ECG prioritizes the common good as the primary economic goal and advocates for radical democracy across political, economic, and financial institutions. This unique focus presents potential tension points warranting closer examination.
IDEAS: How does the ECG compare?
- In the labyrinth of modern politics, clarity often proves elusive amidst a cacophony of conflicting voices and values. However, in modern Western democracies, discussions frequently gravitate towards the four quadrants on the left side of the figure, each with its unique origins and distinctions: conservatism, libertarianism (classical liberalism), modern liberalism (and social democracy) and communitarianism.
- At the origin of this constellation lies the evolution from earlier natural or divine law absolutism, symbolized by point A, where laws, rights and obligations often find their roots in nature or God's will.
- The 18th century marks the genesis of the original political divide, symbolized as B, which delineates the ideological chasm between conservatives and classical liberals. Classical liberals emerge as vanguards of individual freedom, laying thus the foundation of modern Western politics. Their ethos revolves particularly around the primacy of negative freedom—liberation from coercion and interference, historically rejecting the grip of religious institutions, feudal lords, and the aristocracy.
- Transitioning to the 20th century, classical liberals evolve into libertarians, diverging significantly from modern liberals or social democrats, who place a strong emphasis on equality and positive freedom—the freedom to fulfill one's potential and achieve well-being. While they champion measures aimed at fostering broader human capabilities and reducing social inequalities, Libertarians accentuate individual autonomy to the extreme, often advocating minimal state intervention. Consequently, clashes emerge over the size and configuration of the modern welfare state.
- Progressing to postmodern times, we confront the ontological divide at point D, where profound differences emerge between the ideal of unencumbered personhood advocated by all liberals and a communitarian ideology, emphasizing relational self and mutual existence – "I am because you are." A final shift takes us towards a collective "Us", leading towards the radical utopia of socialist unity and a classless collective state, opposing traditional notions of individualism. This step also highlights a final metaphysical distinction, under E: socialism or communism, focusing entirely on material concerns, contrasts with the original idealism, centered on spiritual values.
- Lastly, clearly contrasting views of the state emerge: a mainly European stance sees it as the guardian of an objective and universal ideal, while Anglo-Saxon perspectives often view it as an arena for power struggles over subjective interests.
- This framework provides a rudimentary guide for situating the ECG. We had the strong impression that the ECG inherently seeks to bridge a tension between a radical democratic position on the left, drawing from modern liberal constitutions which - in spite of their wordings - embody a mostly procedural understanding of the common good, while at the same time advocating for a collective and substantial common good, on the right. This also reflects the possible schism between a fundamentally pluralistic political ideal and the Rousseauvian declaration of a popular "sovereign", united in its interpretation of goodness or general will, in our modern society. In this context it is potentially problematic that freedom, the supreme value of liberal democracy, is absent from the common good matrix.
- We also remain somewhat skeptical about the suggestion that a unified interpretation of the common good could be legitimised by reference to widespread alienation, stemming from the perceived deviation of people's preferences from an original disposition or idealized "purer" lifestyle under the influence of capitalism. On the one hand it seems that modern society is inherently diverse and conflictual and it is challenging to envision how substantial differences between preferences, desires, and power dynamics could be effectively reversed across an increasingly fragmented range of stakeholders, without recurrence to totalitarianism. On the other hand, as MacIntyre pointed out, any claim that morality comes down to individual preferences or "emotivism", however consensual, or that moral value could be easily expressed as use value or experiential value, seems problematic. This is certainly something we will need to learn much more about in our journey to come.
INSTITUTIONS: How does the ECG compare?
- When it comes to institutional approaches to economic order, we generally observe two types of approaches (slide 7). The classic approach is dualist, wherein the state oversees the basic structure of the market, such as property rights or contract laws, the market efficiently operates to achieve its outcomes, and the state intervenes again to redistribute commercial outcomes through taxation or social welfare measures.
- The first approach can assume two forms: minimal or expansive. In the minimal approach, exemplified by neoliberal laissez-faire deregulation and liberalization (seen in point A), the focus is on correcting minimal market failures. Conversely, in social democracy and modern liberal regimes, markets are conditional to achieve broader political welfare objectives. Here, approaches may vary between pre-distribution (point B), which aims to correct power imbalances and enhance worker mobility and skills before market activity, and redistribution (point E), which focuses on correcting market results after the transactions have happened.
- The second approach goes beyond regulating the basic structure of the market and seeks to actively change, coordinate, or control market activity itself. In this scenario, as seen in point C, institutions are deployed to empower market actors through the development of ethical norms and personal virtues. Alternatively, as demonstrated in point D, the state or populace may directly intervene in market activities through nationalization of industries, administrative pricing, or changes in property and ownership structures.To simplify, point C represents a bottom-up, inside-out approach, whereas point D signifies a top-down, outside-in approach to shaping economic activity.
- While the ECG encompasses a plethora of highly intelligent, innovative and sophisticated measures to modulate economic activity, including options B and E, there appears to be a predominant inclination towards a statist approach, as indicated in D. While this might prove effective in cases where whole parts of the economy are nationalised, this emphasis might contrast with the significance of fostering inner moral development among actors (option C), both at individual or leadership level and across entire organisations, where a market economy remains prevalent. Cultivating such development could enhance businesses' capacity to navigate complex local situations and make judicious choices amidst conflicting stakeholder preferences, especially in a traditional capitalist environment. We will inquire further into the available body of best practices available to ECG members to achieve their common good objectives. Moreover, we had some difficulties in understanding how exactly a radically democratic oversight over economic regions or institutions, like the "democratic bank", would work in practice, without falling back into the challenges of a planned economy or hampering the coordination and incentivisation mechanisms of the free market.
PEOPLE AND TRANSFORMATION: How does the ECG compare?
- We can generally observe several popular narratives regarding changes to capitalism (slide 8). Firstly, on the left, there's a discourse promoting market-based conscious or green capitalism, emphasizing market or technological solutions to address current challenges. Next, we encounter a Reformist narrative advocating for sustainability through leveraging existing institutional or regulatory measures. Following this, we find a Social Green-Red Progressive narrative, which emphasizes individual and community responsibility, as well as the role of social enterprise. Lastly, there's a red Radical and Revolutionary discourse, seeking collective mobilization in resistance or opposition to the existing order. Each of these narratives has its unique characteristics and requires varying degrees of power to achieve its objectives.
- The crucial question then becomes of course: How can these movements mobilize power effectively to succeed? We can analyze power through three aspects:
- Effectiveness of Political Ideals: This pertains to the extent to which the ideal is widely shared, the realism of its demands on every citizen, and its ability to motivate individuals to take action.
- Opportunity for Political Intervention: This involves activating specific actors who wield power to influence institutions through various processes outlined in the change wheel
- Internal Capabilities of Social Movements: This encompasses aspects such as the movement's backbone support, funding, internal organization, and capacity to create cross-movement partnerships, which are essential for sustaining and expanding opportunities until a tipping point is reached for systemic change.
- In our view the ECG is exemplary in its attempt to put in place a holistic and integrated multi-layered change theory, and it has proven very effective in generating grassroot support amongst an initial early adopter population. It has built up a diverse and sophisticated support structure to maintain and expand that movement internationally. However, prioritizing a top down approach of state intervention in the market economy, as implied by quadrant D in the earlier framework and reflected here in a radical red strategy, may encounter challenges in garnering widespread support beyond initiatives to promote sustainability reporting and regulations, which are always at a risk of succumbing to greenwashing practices (as observed with Triple Bottom Line and others), undermining the genuine intent of the ECG. This dynamic could potentially widen the gap between fervent advocates voluntarily adopting ECG metrics in their mostly small enterprises, basically a "green strategy", and the broader paradigm's vision of radical institutional transformation over time. It will be crucial for the ECG's effectiveness to integrate all layers of the theory of change, and it will be very interesting to investigate further how far especially the municipalities who have subscribed to the ECG approach have pursued institutional transformation. We will seek to learn more about the activities of the ECG to understand what experiences the teams have made - especially in developing synergies across companies, municipalities and also the creation of the ECG Bank - and how successful the ECG has been to generate scale in cooperation with other like-minded initiatives.
References
Diving Deeper
Economics for the Common Good
Perfectionism and the Common Good: Themes in the Philosophy of T. H. Green
The Tyranny of Merit
The MacIntyre Reader
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