How environmentalism, sustainability and transition lead to a new economy

| 7 November 2017 | Category: Ideas, News, Practices


There are many different ways to look at the world. One way is to envision a sustainable world, in which everyone has a fair share in prosperity, health and happiness. In that world we foster a rich nature and a safe climate, as well as a society that maintains and protects our common wealth and values over time.
Both in that world as in our present society, while working, people create new value, and to produce, measure and trade that value, the economy has emerged. But economy went wrong: over time the only value it focused on was the value of money while all other values were disregarded.

It was only during the last century, when a lot of damage to nature already had been done and lives were lost by pollution, that concerned people united in the environmental movement.


From protection via understanding to transition

Those environmentalists started to protect nature from the damages that our economic activities were causing to it. Over time, more thought was put into organizing society in a way that would prevent further harm, not only to ecology, but to our social structures and to people as well. Eventually, these ideas took shape in the concept of sustainability.

Now we are looking for ways to achieve that state of sustainability in a process that still requires a lot of effort. That process is what we call transition, the transformation into a society that guarantees prosperity, happiness and health for everyone and for all times to come. To be successful, this transition requires a new type of economy.


What does the new economy look like?

driehoek_ENHundreds, maybe thousands of analyzes have been made by now of what’s wrong with the current economy. Most conclusions name the unilateral focus on growth of money and matter as the main culprit, along with the skewed distribution of income and property, destruction of the environment, climate and human welfare.

In the new economy we strive to include all types of value, we aim at protecting our environment and the climate and we call for all people to equally share in prosperity and in happiness. Subsequently we need to continue doing so for many years to come.


Upside down and inside out

To some people that’s the world turned upside down. Traditional economists typically tend to see entrepreneurs as the soldiers of the money world. After all, “The sole purpose of business is to make money for the shareholders” is what the influential economist Milton Friedman used to teach.

Friedman was the driving force behind the neoliberal economic ideas of Ronald Reagan and Margaret Thatcher, resulting in the crisis we are still trapped in.

Oxford economist Kate Raworth showed us the consequences of that policy using the image of a doughnut: from an inner ring that represents our basic needs we move to the outer borders of the ring that we can’t surpass. We have no choice but to combine our efforts and activate all our values to share the dough.

Literally putting the economy upside down is also the image that the Austrian scientist Christian Felber uses. He describes the Common Good Economy, in which society as a whole benefits, rather than just a few people and businesses. He puts TAPAS (There Are Plenty Alternative Solutions) over Thatcher’s TINA (There Is No Alternative).

His concept offers a simple but effective framework to replace the rigid doctrine of the neoliberal market economy. Maybe even more important he provides simple tools that allow both SME’s as multinational giants to gain insight and provide transparency about the values they produce. Felber shows us how we can fairly share the doughnut.


Working together creates more value

The concept of the Common Good Economy offers us a collective structure for the numerous initiatives that are already aligned for a better world, to collaborate in a new economy. It shows us how society as a whole will benefit from activating a full range of values and incorporating them is our economical activities..

Most surprising perhaps is that reversing the traditional mindset does not exclude any organization from taking part. Participating in the new economy improves perspectives for all parties involved.


Race to the bottom

There is a clear logic behind this idea. The current economic model is based on competition. Whoever produces cheapest, wins. In order to reduce costs, workforces are reduced to the minimum and organisations pay as low taxes as possible. The race to the bottom knows only few survivors.

Both competing companies and dropouts thus fail to preserve jobs and while all unemployed need support from governments that face ever-reducing tax revenues. Due to increasing competition among workers, remaining jobs will pay less, as a result of which people who hold jobs and unemployed alike will impoverish. A growing army of new poor will be ever less able to buy products from companies, that actually cannibalize on their own markets.


Like an ecosystem

In a co-operative and multi-value economy, businesses and organizations work together to balance income, employment and wellbeing. After all a business in pursuit of maximum monetary profits acts at the expense of employment and wellbeing of people and it distorts the balance in society. In the new economy such a company would be redirected or it will disappear because it poses a threat to the rest of system.

The new economy resembles a natural ecosystem in which businesses and organizations grow like natural organisms until they reach optimal dimensions. Their size and numbers are closely related to the capacity of the surrounding environment, which balance is determined by many different factors. Each factor represents a value in its own. The balance sometimes shifts, but only extreme external influences will cause massive diminishing.

In the current economy it’s like we encourage trees to destroy everything around them in a contest to become the tallest. How long can they last in barren land? After all, the best place for a tree is in the woods. A forest provides the right environment for trees to flourish and for new trees to grow. Likewise, the new economy creates forests in which people and businesses can flourish in a productive coexistence. That’s true gain.

Peter van Vliet


Note: transition or transformation?

The terms ‘transition’ and ‘transition management’ encompass the change towards a more sustainable society and embody questions of how this goal should be achieved. Researchers under the banner of ‘transition’ are concentrated in the Netherlands. A large network of directly and indirectly cooperating authors with clear clusters characterizes transition literature; transformation literature only contains small and isolated author networks. The transition literature is tightly knit with high degrees of internal references and a clearly distinguishable core. Transformation literature has no clear core and fewer connections between authors and articles. Key transition authors are predominantly Dutch. They repeatedly write together and cite each other’s work. The transformation literature makes more use of highly cited research outside the field.

From: The difference between transition and transformation: A bibliometric analysis of two scientific networks.



Category: Ideas, News, Practices