‘Can we design an economy that provides for everyone? In contrast to the current economic design that is limited to recording exchanges among property owners and therefore excludes the misery of people and the degradation of the planet, this article proposes a civic economics of provision that is inclusive and respectful of both. In a provisionary economy, money would flow toward those systems of provision that are critical for human well being and sustainability.
Since the economic crisis of 2007, we have been trying to deal with loans, debts, and credit as though economics was all about controlling money. Perhaps our lack of success in moving toward recovery is that we have been asking the wrong questions. Why do we have lots of work that needs to be done, but high unemployment? Why do the few continue to profit at the expense of the many? How do we include those without property in an economy based on ownership? Instead of designing financial instruments, what would happen if we returned to the original meaning of economics as household management and designed an economics that provided for everyone: an economics of provision?
It may be unusual to think of an economy as a design project. Modern economies are shaped by many factors beyond the direct control of governments or individuals. But economies also do not simply come into being. They are in part designed into being and these designs are, like all designs, influenced by the spirit of the time. Many key features of the current economy were designed at a different time for a different time.
A new design would need to take into account the needs of the present and the role of the economy in shaping a future for an increasingly interdependent world. If we were to design an economy for the future where would we start? We would have to start at the right place or we would never get to where we want to go. Also, we would need to know where we want to go in order to know where we should begin. We would need to be strategic and design to get to where we want to be.
Not everyone agrees that our current economy should be re-designed. Some believe that the economy will self correct—that an “invisible hand” guides the market and all its movements. This belief in a guiding mechanism that cannot be seen and that will somehow, in the most enlightened way, guide us to prosperity, is exactly that, a belief. It is not a fact. It is not even a scientific theory. But, like many beliefs, it is deeply held and hotly defended.
Good design begins with a process of discovery. Let us look at where this deeply held belief comes from. Although there are several sources, probably none is more influential than the writings of Adam Smith. In The Wealth of Nations (1776), Smith began his economic design with a four-stage conjectural story of human evolution. The first human nation was a nation of hunters, which then evolved into a nation of shepherds and farmers, and later a nation of traders, or what he called a commercial nation. This fourth stage was civilized society for Smith, where governments protected people’s property, and where the “invisible hand” transformed individual self-interest into a benefit for all. I think he thought that if we could design an economy where individuals could follow their self-interest, it would actually bring about a wealthy nation.
The real economy of Smith’s time, in contrast to his economic theory, was based on a social system of privilege and power that included slavery. Smith does not make this explicit, but it is quite real. His design for a commercial nation, a nation of property owners, that could bring about a wealthy nation was financially dependent on the slavery of over 11 million Africans—Africans who were kidnapped, chained, transported in barbarous fashion to the Americas, and forced to work in the sugar and tobacco plantations in the colonies that produced the wealth that Smith and others with power and privilege enjoyed. His “civilized society,” depended on the slavery of “savages,” as he called them. Their suffering, of course, could not be a part of his design. Smith designed an economy for property owners, omitting that the property that many owned were human beings. This world was guided not by an “invisible hand” but by an overseer paid to protect the privilege of the few even if it enslaved the many.
We continue to use this Smithian economic design. And, it continues to protect power and privilege. Like Smith, popular economic narratives do not refer to those who live in slave-like conditions whose labor provides us with our expected standard of living at a rock bottom cost. These narratives rarely show the exhaustion of this low-cost labor or the exhaustion of the biosphere on which they and we depend. The invisible hand seems to know how to use an eraser. But, to design anew, we need to discover the conditions of the real and to see how people actually live. Smith’s design for wealth creation is flawed because it does not do that. It suffers from what I would call the pathology of dissociation. It has split off market dynamics and consciousness from the suffering of the real providers of wealth.
This Smithian economics rests on two significant fallacies. First, it rests on the idea that the market is separate from society rather than embedded in it. Second, it treats the economy as though it were a physical system subject to the laws of nature, instead of a social system subject to the ambiguities of human interaction. In fact, the market is a social, not a physical system. It is influenced by and influences social divisions of class, gender, race, religion, sexual orientation, and nationality. Furthermore, all markets exist within social structures of privilege and power. It is important to locate design in the facts and in the realities of people’s real lives.
Most current economic thinking follows Smith’s lead in leaving out the actual providers of wealth—our so-called social and natural capital. These are not included in optimistic notions or mathematical formulas. We need a new economic design; one based on the real rather than on denial and dissociation.
If we start to design an economy embedded in social and natural systems, we can then ask how we should understand the economy’s function in these systems. I want to propose that the function of an economy is to provide us with the material provisions we need to live a good life. If we accept that as the function of an economy, then we require an economics of provision.”