Intro by Michel Bauwens: The following contribution is from Christian Felber, who has co-founded and co-organized the successful Economy for the Common Good network that is mostly active in Austria and German-language countries. This approach broadens the accounting and accountability of enterprises away from its sole reliance on financial achievements, and towards taking to account both negative externalities (damage done) and positive externalities (active progress on matters of sustainability and inclusion, etc..). In this text, Felber also states however that ‘commons movements have no policy’. This is of course untrue as the readers of our blog will know. Felber seems unaware of initiatives such as FLOK, the Commons Transition project, but also the wider networks behind the procomuns.net policy proposals, the European Commons Assembly and lots of other policy work like that of Jose Luis Vivero Pol on the Food Commons.
Christian Felber discusses the Economy for the Common Good, and how it can be combined with the commons to form the basis of a fairer and more sustainable economic order.
“The commons are goods that were given to us by nature, or which were produced by people in a collective way; they are shared and managed jointly, by communities and networks, so that we can preserve them for generations to come. The idea doesn’t sound complicated, but it is nevertheless revolutionary at its roots, as it helps us overcome a dominant dogma of the current capitalist economy. We were all taught that competition is the driver of innovation – and there is no doubt some truth to this statement, but recent research has shown that competition is by no means the only path we can go down. Cooperation can be even more effective. It is by now evident that if people cooperate to find a shared solution to a problem, the product becomes more innovative and more efficient. Commons therefore won’t necessarily hamper progress, they won’t make our societies lazy and backwards; indeed, they will have the potential to guide us down a much more humane and sustainable path to progress.
We must not forget, however, that the commons are not good per se. Collaboration is just a strategy, and the cooperative nature of an endeavour doesn’t in itself mean that it produces something good or useful for society. Reality does not always follow our wishes or ideals.
Collaboration is something that we support only when there is a common good orientation – it is far less desirable when people who share and manage a good only look out for their personal or their group’s interests, at the cost of others. To put it a bit crudely: even murderers can collaborate to become more effective in taking the lives of people. There are a number of active cooperatives today that are profit-oriented, for example the Austrian Raiffeisen Bank, which is partly a capitalistic hedge fund that is eating taxpayers’ money, while its contribution to the common good is marginal. Moreover, there is also the much hyped phenomenon of the collaborative economy, which is a catch-all phrase for a number of different endeavours, ranging from common good-oriented enterprises to capitalist, self-interested organisations – many of them conflicting with the original intent of the commons. Uber or Airbnb are a far cry from what Elinor Ostrom meant when she wrote about the commons, and they are not at all the kinds of endeavours that we could use to build a new, common good-focused economy.
Values of society versus values of business
When contemplating whether or not it is possible to build a commons economy, we also should not forget that today we live in the frame of a capitalist economy, and a complete reshuffling of our world might not be feasible in the short-run. Moreover, it might not even be necessary: in Germany alone we have 4 million companies – and in Austria 400.000; it would not be a good idea to convert all of them into commons, especially if there are companies among them that don’t cause harm to the environment or to our society, such as the “GLS Bank”, the organic bakery “Märkisches Landbrot”, or the “Regionalwert AG” which is a project similar to CSA (community supported agriculture), but formally a shareholder company.
Not to mention that there are some limits to the theory that have not been addressed by the commons community. The best way to go would be the marriage between a number of alternative economic approaches (such as the commons, the solidary economy, the degrowth network, and others), within the democratic framework of the Economy for the Common Good (ECG).
The ECG is a holistic, alternative economic model which envisions a free market economy, in which the common good is the ultimate goal of economic activity. It strives to dissolve the contradiction between the values held by many business interests (such as profit maximization and competition) and values held by society in general such as solidarity, sustainability, or democracy. Proponents of the ECG believe that the values and goals laid down in most Western constitutions can and should be implemented in business practices, so that the current economic order won’t contradict anymore the spirit of these constitutions. A good example of the principles underlying such an economy can be found in the Italian constitution: “Public and private economic activity should be oriented to the common good,” while the Bavarian Constitution says: “The economic activity in its entirety serves the common good.”
Economic success should be measured according to a company’s contribution to the common good. Businesses should be rewarded for practices that improve their compliance to human rights, social justice, and environmental protection. This should be done by measuring their contribution with a so called common good balance sheet (already used by 400 ethical businesses in Europe), which looks at how a business’s activities advance or harm human dignity, solidarity, justice, ecological sustainability, and democracy through evaluating whether products and services satisfy human needs, whether companies’ working conditions are humane, the production processes are environmentally-friendly, etc. It then informs consumers, employees, business partners, and government agencies of the companies’ social and environmental performance (relative to its business-related activities).
The limits of the commons
The cooperation of alternative economies with the economy for the common good would, among other things, help overcome a clear limit of the commons approach: debt. Commons work parallel to the state of law, and parallel to the legal structures of today – debt, however, is a legal structure. If we want to eliminate the massive amounts of (sovereign) debt that are crippling Europe today, we need to work on the legal level. To overcome this problem, the proponents of the economy for the common good propose ways to reduce or eliminate debt (for example stronger taxation on big properties and heritages), as well as the introduction of “positive money”, which would reform the monetary system and would change the way money is created and, as a side effect, reduce sovereign debt significantly.
Today, most of the money we use is created by commercial banks, while the positive money approach prescribes that money should become a public good, and should therefore be created exclusively by central banks. Democratised and public central banks, of course. The transition from the old monetary system to the new one would create a huge gain for societies, approximately in the same value as the now circulating non-effective money (also called book money or banking money). According to some estimates, this non-effective money amounts to as much as 50 percent of GDP in the Eurozone, so by getting rid of banking money you could reduce public debt by exactly 50 percent.
There is also no fiscal policy in the theory of the commons, as the proponents of the commons understand themselves as a different culture than the exchange based market economy which would create the basis for taxes within states of law. In contrast, the economy for the common good has a proposal for a fairer fiscal policy as well: it would start with curbing the unconditional free movement of capital, by making it conditional of an international collaboration in tax policy, which would put an end to tax liberalisation, tax competition, and tax dumping. Then, as a next step we would shift the tax burden from labour to speculative capital and overconcentrated capital; moreover, we would increase the share of tax that comes from the unsustainable use of nature, which is today at around 5 percent and would have to increase to up to 50 percent so that we can experience an absolute reduction in the consumption of biological resources in industrialised nations.
Beyond the fiscal policy approach, we propose “ecological human rights” which are consumption rights. The idea is that the yearly gift of the planet’s biological resources is divided by all human beings, and the outcoming share is our yearly consumption right which could be credited on our “ecological account” that works in the same way as a financial account: when it is empty, you do not have purchase power any more… On the other side of the coin, the ecological human rights are the rights of nature, of our planet. This idea, like virtually all other innovations of the ECG, can only be implemented within a state of law that proclaims and protects this human right and the rights of Nature.
That is the general shortcoming of the commons approach: there are no known proposals on how to change our world on the legal level, let alone how to change the democratic system in itself. The strategic choice to work on the cultural, but not legal level, marks a strong limit of the commons. The ECG works strongly, but not exclusively, on the legal level, inviting the sovereign citizens to recognise and use their sovereignty and try to change both existing legal decisions as well as decision procedures, starting from the democratic reform of our constitutions. Thanks to the outflowing “sovereign rights”, the now sovereign citizens could then legally promote and protect commons, as well as anything else.
How to kick start the project of the common good?
To create a fairer economy, we need to first show that what we currently call an economy has in fact nothing to do with a real “economy” in its original (ancient Greek) meaning, as its success is measured by monetary indicators such as GDP, financial profit, or the return on investment, instead of what the actual goals of economic activity should be: the advancement of the quality of life, as well as the fulfilment of human needs and fundamental values.
We need to ask ourselves the question, what do we want to achieve with our economic policy? Full employment or the fair provision of food, housing, education, health services to our people, together with letting them have a say in the design of the rules?
Secondly, we need to prove that we know the solution to the current problems. To do this we need to offer a simple and clear narrative, a comprehensive guide, because the many good solutions that were put forward by progressive theorists, such as unconditional basic income, the elimination of interests, or the 20-hour workweek, cannot be called a theory of change while they stand alone.
The economy for the common good, however, is clear and consistent, and provides a real theory of change: a comprehensive description of how and why the desired improvement of our economy is expected to happen. This, amongst others, is one of the reason why so many people have joined our initiative, and even many Green parties have expressed interest in the theory: in Salzburg (Austria) and Baden-Württemberg (Germany), for example, the local Greens have already adopted the basic tenets of ECG and made it part of the economic programme of these counties.
Why a market economy?
According to the categorisation of the ECG, there are 4 possible types of economic models: a planned economy, a market economy, a gift economy, and self-sufficiency. The economy for the common good falls under the category of the market economy, while the commons are a type of gift-economy.
The economy for the common good doesn’t say that the market economy is the best of all. The most important reason why we are a market economy is that today’s current capitalist system is also a market economy. We know that if we want to establish a more just economy, we need to start from here.
However, there are 3 restrictions to the market economy that we propose: firstly, it should be a non-capitalistic, cooperative, and fully ethical market economy; second, it should be a truly “liberal” market economy (meaning that every human being should have the same rights, liberties, and opportunities); and third, we envision a shrinking market economy: since we are consuming too much today, we believe that we should shrink the market economy to about half of its size, and with it halve the working hours of people, so that they only work 20 hour weeks in the monetary based market economy. This way there can be enough time for the people to engage in other kinds of economic activities, such as self-sufficiency, and gift economic practices. Moreover, the economy for the common good says that not only the time and space should be open for creating more commons, but there should also be legal opportunities and legal support to facilitate the commons – another argument for working with and on the state of law.
The strategy of the ECG is to work with companies, municipalities, universities, consumers, the general public, the media, and the representatives of other alternative economic approaches – first and foremostly the commons – to get the word out, and lay the groundwork for a new economic system.
The basis of this system would be the acceptance of a wide range of property forms: private property, public property, collective or cooperative property, social property (meaning big industrial companies in the hands of society, similar to the enormously successful but shortlived Yugoslav experiment of the early 1950s that enabled “workers’ self-management”), commons (which are not a form of property per se, but a cultural practice and a worldview), the use of nature without viewing it as some form of property, and finally the respectful non-use of nature. For me, all of these forms of property are acceptable in an economic order, but none should be exclusive or predominant. The economy for the common good therefore proposes a mixture of all of them, and gives limits and conditions to all.
In a nutshell, this means that the users of all these property forms need to show that their activities are not harmful to the rest of society, and are compatible with an economic order that aims to improve quality of life, satisfy human needs, and fulfil fundamental values.
Our envisioned economic system would exist in the current framework of a rules-based state of law – however, the flaws of current democracy would be fixed, in order to make the new system more functional. We aim to deepen democracy towards a sovereign democracy: this would mean that the fundamental rules and guiding principles of our lives would be elaborated and defined by the people.
The formation of the democratic constitution(s) would start with a one-year-long democratic process, in which we would organise assemblies for all policy fields (such as economic policy); and in these assemblies everyone would be able to make a proposal on the most important cornerstones of the economic system. All alternative economic approaches, like the solidary economy, degrowth, the Transition Town movement, and many others would be allowed to present their ideas on how to design and shape the twenty most important cornerstones of the economy, and then we would make a decision, using a procedure that has already proven extremely effective: the systemic consensus. That means that all the participants can propose several rules to guide the economy (at least two: the current state of the art and one other) and the winner will be the one that meets the least resistance. This procedure is particularly important because building a system around the widest support doesn’t work, and can easily become a door-opener for lobbyists. Our procedure, which was invented by two mathematicians at the University of Graz, however, would cause the least pain in society; every rule, norm, or system gives and takes freedom in a higher or lesser degree; the method of “systemic consensus” allows to find that alternative that restricts the liberty of all citizens in the least possible degree.
There is no doubt that the economic order in which we live today cannot stay as it is forever. The financial, economic, social, political, and environmental crises of Europe are clear signs that we need to fundamentally rethink the way we use our resources. As outlined in the previous paragraphs, the commons are one of the many ideas that can provide a solution that could be the basis of a just, solidary, and sustainable economic order. Added together with the economy for the common good, and other alternative economic approaches, they become a structural element of the economy of the future.
The Green European Journal, published by the European Green Foundation, has published a very interesting special issue focusing on the urban commons, which we want to specially honour and support by bringing individual attention to several of its contributions. This is our 6th article in the series. It’s a landmark special issue that warrants reading it in full.