How many economies and how do they inter-relate?
Here’s a summary of Community-Currency advocate John Rogers, who distinguishes four economies. After quoting him, I want to use the opportunity to put forward a slightly different version.
John Rogers:
The biggest picture we can imagine is one of Four Economies. At the bottom, underpinning everything else, the Natural Economy – planet earth with its ecosystems. Just above, the Caring or Core Economy – the unpaid work of human families and communities bringing up children, learning skills etc. Above that, the Market Economy – all the activities of businesses producing goods and services, the work of governments and the public sector, any paid work At the top, the Casino Economy – hedge funds, futures markets, currency speculation, making money out of money etc.
Money enters the picture as the primary tool that allows the Market and Casino Economies to operate. The Market and Casino Economies constantly encroach on the Natural and Core Economies by attempting to monetise them. For instance, when natural resources are ‘priced’ according to extraction ‘costs’ to the businesses engaged in these exercises. Economists describe the costs that are not ‘internalised’ or paid for by these businesses directly as ‘externalities’ which are effectively dumped on communities and environments which are expected to internalise them ie deal with them as best they can. Governments attempt to offset the worst aspects of these externalities by charging taxes to businesses and consumers to clean up environments, provide health services etc. It is never enough. Another example would be when childcare or elderly health care is carried out by businesses, therefore monetised, then these services enter the Market Economy and the relationships change from those experienced in the Core Economy.
Critique:
The Natural Economy is not really an economy since it is outside human intervention. The concept is confusing since many economists are now using the concept of Natural Economy to refer to a market system which is neutral towards the biosphere (no more negative externalities allowed).
The Core Economy refers to the domestic economy, which is of course important, but perhaps not the core of where economic value is produced.
The distinction between market economy and casino economy is interesting.
Alternative vision:
I contend that the core economy will be the new Commons driven by peer production. It is here that the key social, technical and cultural innovations will be produced, and it will and should (for its optimal functioning), operate outside the monetary sphere.
The domestic economy insures social reproduction and will continue to exist, and will be better supported.
The market economy will be in charge of scarce natural goods and it will be a natural economy in the sense described above. It will be governed by a sufficiency-based monetary system. It will also be subjected to peer arbitrage principles (fair trade). Large parts of the market economy will be ‘build-only’ since they will use the freely available designs from the peer production sphere. Lots of cultural exchanges may be monetized in this market as well.
Various forms of quasi-market and gift economies will abound, to revitalize local economies, to exchange services, to sustain traditional economies still living outside the monetary markets. An open money infrastructure will be a requirement for this. This is where the community currencies will have an important role.
There will still be collective public goods (state), but also collective common goods (Commons), with the state as meta-regulator.
