How can we heal our flawed economy Part 3

I have written of the many flaws in our current economic system, and looked at the alternative proposals of a Binary economics, (promoted by Rodney Shakespeare et al), a relational economics, from the Jubilee Centre, and now I come to a third way, an "earth based" economy.

This model is based on the natural cycle seen in nature whereby everything is reused or recycled, everything in the cycle has a use or purpose, there is a mutual dependency where nothing is wasted and where there is a balance of cooperation and competition between organisms.

A lovely example of this mutuality is seen with the life cycle of the fig wasp and the fig fruit. Each species of fig tree relies on a particular species of wasp for the pollination of its flowers, within the fruit structure. The larvae of the wasp are then nurtured to maturity within the fig fruit.

This "earth based economy" idea originated within The Social Venture Network (SVN), founded in 1987 by Josh Mailman and Wayne Silby, as a non-profit network committed to inspiring ‘a community of business and social leaders to build a just economy and sustainable planet.’ In 2001 the Network published an important Collaborative Working Document, titled The Path to Living Economies, (now to be found on the Living Economies Forum website, the "online home of David Korten, author, lecturer and "engaged citizen." see below)

Within this document many concepts representing the life’s work of an array of different authors have been brought together into a valuable summary within a framework of the perceived urgent need for a Living Economy: ‘a social and economic system that is sustainable, equitable and cooperative.’ This would incorporate systems based on fair profit as against maximum profit and businesses described as ‘not for profit living enterprises’ that are ‘place-based, human-scale, stakeholder-owned, democratically accountable, and life serving’; that would function as ‘communities of people engaged in the business of creating just, sustainable and fulfilling livelihoods for themselves and their communities.’
The SVN paper makes for fascinating and informative reading. The basic thesis of the paper should sound familiar by now to followers of my blog; that a system geared entirely towards the maximizing of profit for the few at the expense of many is fundamentally flawed.

The SVN Paper argues that to ensure the survival and fulfillment of humans we must foster again that same balance and sustainable cycle, seen in nature, and starting with individuals and communities. Since publication the movement has come a long way, indeed positively flourishes, and there is much much more on David Korten's website, including, and most importantly, a valuable paper on How to Get Involved. I urge my readers to have a look at this excellent resource for making change happen.


David Korten is the author of Agenda for a New Economy: From Phantom Wealth to Real Wealth
which "offers more in-depth advice on how to mount a grassroots campaign to bring about an economy based on locally owned, community oriented “living enterprises” whose success is measured as much by their positive impact on people and the environment as by their positive balance sheet."



 © Eleanor Stoneham 2011

Companies are driven by profit and growth not by human values

On 5th April I explained a serious flaw in our economics - the way that loans are made out of fiat money - i.e. created out of nothing!!

Edward Cahn has observed of this phenomenon that: ‘Money has taken on a life of its own: its function is to produce for the sake of reproducing – regardless of the impact on the health of the human community… increasingly what we are witnessing in the world’s money markets looks more and more like cancer.’1 Now cancer is of course dangerous and often fatal, requiring unpleasant treatments along the way.

 

As with Cahn’s analogy to cancer of the world’s largely artificial money markets, so according to David Korten the publicly traded limited liability company is best described as ‘a pool of money dedicated to its self replication’, and he also likens this to a cancer cell in the body growing inexorably without regard for its host or its own future. Both are destined towards destruction.² They must adapt or die. The problem is that companies are driven to maximize profit for the ultimate benefit of the shareholders and directors, and the shareholders and directors are totally disassociated from the workers. There is too often no account taken of human values in the equation. What is more, the flow of wealth is all one way, normally out of the community where the business is transacted, as shareholders will almost always live elsewhere. This bleeds the community where the business is situated and for that reason alone cannot be a good thing.

Even worse, in the large corporation the chairman can defend his company’s actions by saying that they were what the shareholder wanted. In fact the directors have a legal duty to maximize profit for the shareholders! Peter Challen has called this  ³ ‘killing from behind a desk’ or ‘personal aspirations suppressed by institutional arrogance’, there being a clear conflict between what we actually do and what we would like others to think that we do.

A moment's pause tells us that there is something wrong here - it is not just, equitable or fair whichever way you look at it. It is certainly no way to heal the world!! So what do we do about it? There are better options, and I will come back to explore these in later posts.

1. Cahn, Edgar S., No More Throw-Away People: The Co-Production Imperative Washington D.C.: Essential Books, 2000, p. 68.

2. David Korten, Living Economies for a Living Planet. http://livingeconomiesforum.org/i-intro

3. Peter Challen, 2005 Exposing Corporate and Money Autocracy to Public Scrutiny as Major Threats to the Global Commons http://www.sustecweb.co.uk/past/sustec13-2/exposing_corporate.htm (From It’s Simpol ! -- The Simultaneous Policy News, W i n t e r 2 0 0 4 / 0 5

The quarterly newsletter from the INTERNATIONAL SIMULTANEOUS POLICY ORGANISATION (ISPO))