The most promising TAPAs you’ll ever have!

Aug 8, 2019 by

In their second lecture at AEMS, Christian Felber, a self-described deep ecologist, challenged us to think about what the goals of our economic system are and should be. Currently, there exists a confusion regarding this question. The term ‘economy’ derives from the ancient Greek ‘oikonomia’, which, following Aristotle, refers to household management that ensures well-being of all its members – or, in other words, a common good. However, we seem to have moved away from an understanding of economics where money is a means to a good life towards one where money is an end in itself. Since an economy that serves the common good is a value explicitly stated in a number of constitutions, including those of such diverse countries as Germany, Colombia and the United States, a lot of economic activity today could be considered unconstitutional due to the injustice and environmental damage it causes.

In defence of the neoliberal reforms advanced by her government, Margaret Thatcher famously referred to TINA – ‘There is no alternative’. However, Christian Felber disagrees and offers a very promising TAPAs – ‘There are plenty of alternatives’, one being a democratic economy for the common good. This framework introduces an economy that is not divorced from politics and feelings, one where the citizens get to decide on what its goals should be. In the common good economy, companies would only be successful if they made the society more successful. The compliance to the common good would be ensured through the ‘visible hand’ of a Common Good Balance Sheet, which measures how firms fulfil key constitutional values that serve the common good, including human dignity, justice, ecological sustainability and economic democracy. The balance sheet would include 20 indicators democratically chosen by the people in different regions. Therefore, the balance sheets would look differently depending on where you live, but would have the common denominator of a common good score. The companies that score higher on the common good checklist would receive a number of incentives to continue on this path, such as lower taxes. In addition, the score companies receive would be made visible via ECO labels, so that citizens could make informed decisions in their consumption. This should create a positive feedback loop, with more and more companies striving to improve the common good.

The focus on common good as the ultimate goal of the economy provides a holistic approach to transforming the current economic system while keeping existing institutions. Yet, the holistic model also implies complexity, which in practice risks turning into a massive bureaucracy. Nevertheless, this approach is beneficial as it allows a diversity of opinions regarding the fundamental values we hold as human beings, and the opportunity to marry them with our economic system.

Written by: Egle Kareckaite & Nicole Lunzer

Based on the lectures “Economic democracy” and “Economy for the Common Good” held by Christian Felber during AEMS 2019.