Economy for the Common Good: 20 cornerstones

ECONOMY FOR THE COMMON GOOD
A Democratic Alternative is Growing
While the current economic model in some cases creates prosperity, it also creates a number of serious
problems: unemployment, inequality, poverty, exclusion, hunger, environmental degradation, and
climate change. Social and ecological crises are accompanied by three fundamental cultural crises: an
existential crisis of purpose in life, a crisis of values and a crisis of democracy.
In the eyes of many observers we are dealing with a fundamental systemic crisis, which can no longer
be solved by individual reforms, but only by a “system change”. Besides a change in fundamental values
and a change in life styles we also need an evolution in the legal framework for the economic system.
According to a poll by the Bertelsmann Foundation in the summer of 2010, which was repeated in 2012,
80 to 90% of Germans and Austrians want a “new economic order”.
The time is ripe for a new “great transformation” (Karl Polanyi), in the direction of embedding the
economy into the social context, into the set of constitutional base values, into people´s hearts and into
the ecological foundations of life.
20 CORNERSTONES OF THE ECONOMY FOR THE COMMON GOOD
1. The same collectively shared values that contribute to fulfilling interpersonal relationships are the
basis for the ECG: confidence building, cooperation, appreciation, democracy, solidarity. (Scientific
research shows that fulfilling interpersonal relationships constitute a key factor to happiness and
motivation.)
2. A shift from competition and profit-orientation to cooperation and the pursuit of the common
good will take place, established through a new regulatory incentive framework. Companies will be
awarded for cooperation and solidarity. Competition will still be possible, but it may be disadvantageous.
3. Economic success will no longer be measured by monetary indicators, but by non-monetary,
value indicators. At the macroeconomic level (national economy) the GDP will be replaced - as an
indicator of success - by the Common Good Product; on the microeconomic level (company) the
financial balance sheet by the Common Good Balance Sheet (CGBS). The latter becomes the main
balance sheet of all companies. The more social, ecological and democratic, and cooperative
companies become the better will be the results of their Common Good Balance Sheet. The better the
CGBS results of the companies of a national economy, the higher its Common Good Product.
4. The better the common good result, the more legal advantages are granted to a certain
company: lower taxes, lower customs, more favorable loans, and preferential treatment in public
spending. Market access thus becomes easier for ethical companies, and fair, ethical, regional and
ecological products become more affordable than unfair, non-ethical, and environmentally harmful
products.
5. The financial balance sheet becomes a secondary balance sheet alongside the primary
Common Good Balance Sheet. Financial profit is no longer an end, but a means. It merely serves to
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achieve the goal of the company or, to be more precise, the goal of all entrepreneurship: to further and
increase the common good. Business profits may be used for investments (with social and/or ecological
value), loan repayment, accrued liabilities (to a limited extent), limited profit distribution to employees
and for interest-free loans to other companies. Profits may not be used for distribution to non-employees,
hostile takeovers, investments in financial markets, or donations to political parties. In return, the tax on
corporate profits will be abolished.
6. As profit is no longer an end in itself, companies may now aspire to their optimal size. They are
not in danger of being bought out and they are not forced to outgrow or outperform other companies.
Businesses will be freed from the prevailing force of continual growth and the pressure of dog-eat-dog
competition.
7. Due to the possibility to aspire to and maintain the optimal size, there will be many companies
in all branches. As the force to grow ends, cooperation with other companies will be a lot easier.
Companies can help each other with know-how, client-forwarding, workforce-sharing or interest-free
loans. For these acts they will be rewarded with more favorable results in the CGBS – not at the cost of
their competitors, but for their benefit. Companies start building a learning community, the economy
turns into a win-win-setting.
8. Inequalities in income and wealth will be limited through democratic discussion and decision:
the maximum salary could be capped at, for example, 10 times the minimum wage, individual wealth at
10 million euros. Capital transfer and inheritance can be permitted tax free up to 500,000 Euros and in
the case of family-owned enterprises up to 10 million euros. Any exceeding amount is distributed to the
next generation via a “generational fund” like a democratic endowment. These figures will be discussed
and finalized in democratically-run economic conventions.
9. Large-scale enterprises with more than 250 employees partially pass over into a worker-owned
structure or public ownership. Elected delegates of “regional economic conventions” will represent the
public. The government does not exercise authority over public enterprises.
10. The same applies to democratic commons, the third category of property, next to a majority of
(small) privately-owned businesses and a minority of large-scale enterprises owned (partly) by
employees and the public. “Democratic commons” are enterprises which provide basic services in the
sectors of education, health, social welfare, mobility, energy, communication, and banking: services of
general interest.
11. The democratic bank is a major democratic common. Like every enterprise it serves the
common good and, as a democratic common, the democratic sovereign – not the government –
exercises control over the bank. Its core services include guaranteed savings, low-interest loans, ecosocial
high risk loans and free demand deposits accounts. The state will be financed primarily by interestfree
loans from a central bank. The central bank gets the exclusive right to the creation of money and
controls the cross-border movement of capital to end tax evasion. Financial markets as we know them
today will no longer exist.
12. As described by John Maynard Keynes, a global currency cooperation will be established with
a trade currency (“Globo”, “Terra”) to finance international trade and investment. On the local level,
regional currencies can complement national currencies. To avoid unfair trade, the EU shall establish a
fair trade area (Common Good Area) with equal standards. For importers, the tariff correlates with the
CWBS result: the better the result, the lower the tariff. The long-term goal is a Global Common Good
Area as a UN agreement.
13. The intrinsic value of nature is recognized, thus it cannot become private property. A
person/family/company who wants to use a piece of land for the purpose of living/farming/manufacturing,
will be assigned what he or she needs for free or for a user fee. Receiving land will be preconditioned
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on ecological management and the fulfilling of a concrete need. As a consequence, land grabbing, largescale
land ownership and real estate speculation will end. In return, the property tax will be abolished.
14. Economic growth is no longer a political goal, rather the reduction of the carbon footprint and
increasing sustainability. The categorical imperative as described by Immanuel Kant will be extended
by an ecological dimension: One shall only choose a living standard that can be shared by all people of
the world without diminishing the possibility of others to choose the same living standard. Individuals
and companies will be encouraged to reduce their carbon footprints to a globally just and sustainable
level.
15. Average working time will be reduced to 30 to 33 hours per week. As a consequence, people
will have more time for other kinds of work: Human relations (care for children, sick and the elderly),
personal development (arts, education, gardening) as well as community and political work. Due to this
more balanced distribution of work time, the living standard will become less resource intensive, more
sufficient and ecologically sustainable.
16. One out of ten professional years will be a free year. In the free year, people can do what they
want. As a consequence, demand on labor markets will decrease by ten per cent – the present
unemployment rate in the European Union.
17. Direct democracy and participatory democracy will be added to representative democracy. The
democratic sovereign (the people) will be able to influence their representatives, initiate and pass laws,
change the constitution, and control important economic domains, such as railways, energy providers,
or banks. In a “real democracy”, the needs and interests of the sovereign people and its representatives
are identical. One condition for real democracy is comprehensive rights to codetermination and power
control.
18. All 20 cornerstones shall be developed in a broad bottom-up process, before they are handed
over to a democratically-elected constitutional convention. This convention proposes laws that are
submitted to referendum. Those cornerstones that are approved by the people will be anchored in the
constitution. In any moment, the constitution can be changed– by the people! Alongside the economic
convention, a number of other assemblies are summoned to further develop democracy: education
convention, media convention, democratic convention.
19. To anchor the values for the common good deeply in the next generations, the educational
system also has to serve the common good. This requires new forms of school and new educational
material, e. g. values and ethics, “emotionology”, communication, democracy and environmental
awareness.
20. As the parameters of entrepreneurial success have a new definition in the Economy for the
Common Good, different leadership skills will be required. Those persons that are socially responsible
and competent, empathic and compassionate, socially and ecologically oriented will be the highest in
demand and serve as the new role models for business leaders.
The Economy for the Common Good is not the “best” economic model nor the end of history; it is only
a next possible next step into the future. It is a participatory and open process that strives to work
together with other social movements. Thanks to the collective commitment of a growing number of
courageous and resolute persons, we will be able to create something fundamentally new.
Implementation depends on intrinsic motivation and personal responsibility, economic incentives, a legal
framework as well as raised awareness.
www.economy-for-the-common-good
Last updated: April 19, 2013
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