The Fabulous Future of p2p Economics, Commerce and Democracy

This blog originally posted here on Huffington Post. 

I’ve just returned from an eye-opening, mind-expanding week in Leipzig at the 4th Annual global Degrowth congress. This vibrant gathering brought together over 3,000, mostly young, ‘prosumer’ activists and practitioners from a variety of new economy movements.

While there I learnt a huge amount from makers, hacktivists, anarcho-syndical cooperativists, collaborative-commoners, anti-capitalists, free-culturalists, buen-vivir, transitioners, Fab-Lab-ers, p2p-ers and social-entrepreneurs from places as diverse as Spain, India, Bolivia and Brazil. And continuing the theme of new economics, on the train back I read Jeremy Rifkin’s important new book the “The Zero Marginal Cost Society – the internet of things, the collaborative economy, and the eclipse of capitalism.”

In preparation for Degrowth I also spent three days in Meissen on a deep-dive with a small group of p2p and commons movement leaders including David Bollier andMichel Bauwens who, in the introduction to his book, both praise Rifkin as a visionary of a new world order.

I was in Germany as part of the research and outreach for work on the Real Economy Lab, an initiative that aims to help connect theory and practice through a collaborative mind-mapping of the wider ecosystem of the post-growth new economy movement. The hope is that this process can form the start of a global alliance building to converge these various new economy movements into one force for good.

Germany was a good place to start as its probably the country furthest ahead in the combination of the Internet of Things, renewable, decentralized and community controlled energy, grassroots commons activists and ‘makers’.

One thing everyone I met have in common is a desire to create a new world order, a new way of creating, connecting and being which is beyond the market, beyond ownership, growth and capitalism. To them the idea of working for a large company for a wage has just never even been on the radar. Indeed the idea of large, shareholder owned private enterprises doesn’t feature in the world they are co-creating. Many of them have also conceptually, and in some cases, such as Cooperativa Integral Catalana, literally moved beyond any real relationship with politics and the state. Indeed, even the cutting edge of politics, Citizen-democracy parties like Partido X and Podemos, are running fast just to try to keep up with the convergence of these movements.

Emerging from this convergence is a powerful vision of a new world order and paradigm which represents real hope of building a bottom-up safety-net to catch the ever-more fragile top-down, as it unravels and collapses around us.

The new paradigm these movements are creating is post-enlightenment, lateral not hierarchical, chaordic, networked, decentralist, inclusive, open, rebellious and fun. It represents a near future that will test and fail much of the incumbent and dying models of politics and business. And it cocks a snoot at the Lockean, Millian and Social-Darwinian paradigm and story that has so atomised, excluded and isolated us from each other and so ravaged the planet.

What have till now been separate movements of the co-operative, commonsp2p, Transition and Makers are converging and learning that they have much in common and that if they stand and develop together they can be more than a side-show and thorn-in-the-side of the mainstream — they can become the mainstream in a new post capitalist, post growth world.

Jeremy Rifkin’s new book The Zero Marginal Cost Society is, along with Naomi Klein’s new “This Changes Everything – capitalism versus the climate,” a current must read. It documents an on-going shift to what Rifkin calls the Third Industrial Revolution. And it summarizes much of what I experienced last week in Leipzig about the coming together of the Internet of Things (IoT), the p2p worlds, the collaborative-commons and new economy movements.

Rifkin points to a central contradiction of capitalism which I find a useful addition to the new economy theories of people like Professors Schweickart, Olin-Wright and Alperovitz. This is that capitalism’s inbuilt dynamism drives it necessarily, if left to a truly free market, towards near-zero marginal costs of production for additional production units — what Rifkin calls ‘extreme productivity’. The implications of this are revolutionary — once at near-zero the system’s inbuilt dynamics stall and start to unravel — “goods an services become nearly free, the exchange of property on markets shuts down and the capitalist system dies”.

Thus the very DNA of capitalism, that which has made it such a success, has within it its own lethal sting in the tail. Its designed to kill itself. And to kill off any enterprise, such as the private shareholder owned corporate, reliant on its continuing. Capitalism has done its job and made itself redundant. If only we had made it to where we are now, on the edge of near-zero marginal costs, and the new economy it heralds, maybe 40 years ago, we might not now be in our nose-dive into possibly unstoppable, runaway climate chaos.

Rifkin’s view is that we are seeing the eclipsing of capitalism as a system and that incumbent centralised and vertically integrated profit-orientated businesses, whilst they will try to mimic, learn from and slip-stream this new order, will at best be carried only a short way on this journey to the new economy. Certain sectors like energy, health, finance and consumer products are first in the firing line. Some nimble incumbents in other sectors may morph into new forms of enterprise that can flourish within the new order.

The idea that we could soon all be able to 3D print our own homes, cars, clothes using open-access, open-source code, near-free energy and resources in local Fab Labs is mind-blowing but a near reality. It blows the hierarchical, inequality based current economy out of the (3d printed) bathtub. If done with a close eye on ecological limits it could herald a true circular economy.

I’ve long though the next paradigm will need to go beyond the tired state versus market, capitalism versus socialism debate and, as Rifkin says “the young collaborationists are borrowing the principles virtues of both the capitalists and the socialists, while eliminating the centralising nature of both the free market and the bureaucratic state”. I’m not sure what Marx would have made of the idea of the shift from exchange-value to ‘shared-value’, nor where this sits vis a vis ‘use value’ but as Rifkin says “The rule book that governs a market exchange economy becomes far less relevant to the life of society” in what he sees as the soon-to-be dis-enclosure of the means of production and the eclipsing of capitalism by the collaborative commons.

The vision of networked, open-source, open-access, exponentially-increasing extreme productivity in the hands of the masses, not private interests, is of course manna from heaven. I’m not entirely convinced by all of Rifkin’s logic. His future seems a world covered in endless Pv farms and wind turbines and his thinking on decoupling seems untested and incommensurable with the reality of the scale and intensity of energy and carbon reductions needed to keep us from a 4 degree world. But there is much in here which rings true.

Rifkin’s thinking dovetails nicely with Klein’s latest book which is also about the eclipsing of capitalism by people-power. Indeed Klein champions many of the movements I met in Leipzig and gave a keynote address to the congress.

This p2p, people-powered revolution in commerce, economics and democracy is all emergent stuff. Whilst experimentation is flourishing and producing real impact, the social and movement networks are not yet fully connected into a coherent global alliance. And as yet they don’t have an over-arching vision, narrative and route-map which can inform their various trajectories and combine to build a progressive anti Shock Doctrinaire alternative to the unravelling of our current systems.

But after what I’ve seen and heard this week I’m ever more optimistic. I feel a bit like I’ve just been plugged into the Matrix – only its not malign and its in our control. I’ve seen the future and it’s Fab-ulous.

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The emergent new economy

This blog first posted at Compass Online

President Clinton was in town recently at an event with BoE Governor Mark Carney, Christine Lagarde, Paul Polman and Prince Charles amongst the many speakers. In the room were alleged to be the people who control a third of the world’s liquid assets – in short the 1%.

They were here as part of the Inclusive Capitalism initiative which is looking to reform our economics to be fairer to people and planet. Inclusive Capitalism is just one of many other very similar initiatives including; Sustainable Economy, Renewing Capitalism, Conscious Capitalism, Corporation 2020, Sustainable Capitalism, Responsible Capitalism, Clean Capitalism, The Responsible Economy, Capitalism as if the Planet Matters, Creative Capitalism, Just Capitalism, Spiritual Capital, Tomorrow’s Company, Breakthrough Capitalism, Sir Richard Branson’s B Team and WEFs New Social Contract.

Why this flurry of new efforts to reframe, recreate or reform capitalism? One reason is clearly that 2008 and its ongoing repercussions have shaken many shibboleths and challenged assumptions about the viability of anything like business-as-usual. As Nafeez Ahmed says  of the Inclusive Capitalism event “central to the proceedings was an undercurrent of elite fear that the increasing disenfranchisement of the vast majority of the planetary population under decades of capitalist business as usual could well be its undoing.”

As co-chair of the Inclusive Capitalism taskforce, McKinsey managing director Dominic Barton, explained “… there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results.”

Notable members of the 1% are now openly speaking what would have been heretical thoughts not long ago. Legendary fund manager and head of GMO Jeremy Grantham has recently said: “Capitalism does millions of things better than the alternatives. However, it is totally ill-equipped to deal with a small handful of issues. Unfortunately, they are the issues that are absolutely central to our long-term wellbeing and even survival.” And Oystein Dahle, ex VP of Exxon Mobil said that communism collapsed: “Because it didn’t allow prices to tell the economic truth. Capitalism will collapse because it doesn’t allow prices to show the ecological truth.”

Another reason for this flurry of activity is that the mainstream has noticed an explosion of alternative practices, such as those of the ‘collaborative economy’, that represent real threats to this business-as-usual mindset and hegemony.

The emergent new economy

Indeed, Kevin Keely, former executive editor of Wired has said “How close to a non-capitalistic, open source peer production society can this movement take us? Closer than we thought.” Visionary thinker Jeremy Rifkin talks of a “collaborative commons eclipsing capitalism” and Harvard Professor Jim Heskett says “Now questions are again arising about whether we are about to experience a post-capitalist society centered around the creation and sharing of goods and services that have marginal costs approaching zero”. Echoing this, the BBC’s Paul Mason predicts that newly networked and disenfranchised citizens will soon bring us into a ‘Post Capitalism’ world.   

Alongside this new ‘fractional’, ‘sharing’ economy are multitudes of other fast growing movements such as the Maker movement, the interest free money system, the Transition Towns movement, the Commoning, P2P and Commons movements and the global cooperative movement with 1bn members, 100m employees and worth $trillians.

Professor Gar Alperovitz, a leading thinking and practitioner in the new economy, has recently said “just below the surface of media attention literally thousands of grass roots institution-changing, wealth-democratizing efforts have been quietly developing.” Along with people like Professors Erik Olin Wright, Steve Keen, John Bellamy Foster and David Schweickart, Alperovitz is just one of many academics and think-tanks actively working on the shape and functioning of a radically new form of economics.      

Wonderful and hopeful as all of this is, the problem with these hundreds of emerging schools of thought, practice, movements and initiatives is that few of them seem to be aware of each other, let alone collaborating and cross-fertilizing. No one seems to know how they do or don’t fit together, what kind of ecosystem they might create and how collectively they might have some answers to the reform of economics and politics.

Real Economy Lab

Frustrated by this lack of clarity and in response to all this activity, a group of us have set up an initiative called the Real Economy Lab which hopes to map all this activity, to understand how it all fits together, what gaps in thinking and experimenting there may be, and to provide a space where these many initiatives can collaborate and coalesce into a global movement for change.

We want to help dial up the voice of the 99% into the global debate about the future of economics and commerce.  Perhaps the 1% are right to suspect that their time in control might need to cede to a wider collaboration with new insurgent movements of the 99%. As Einstein said, “Those who manage their way into a crisis are not necessarily the right people to manage their way out of a crisis.”

Some of the questions and movement the Lab are examining and connecting with include:

  • The future of money. What might money look like and how might the investment sector operate in the future. A host of innovative new ideas and experiments pose real threats to the status quo and huge new opportunities. Just look at the rise and rise of peer-to-peer finance like Zopa, or the Positive money and debt free finance movements, the local currency and credit union movements.
  • The future of commerce. What might business look like in the future. Already the frictionless collaborative economy is threatening incumbents in many sectors. Growing shares of the global economy are becoming co-operatised and alternative socialised business forms are flourishing.
  • The future of ownership. What are the implications of a shift towards mass co-operative control of enterprise and of resources through things like Community Land Trusts, Mutual Home Ownership Societies and other ‘economic democracy’ initiatives. The assumption that things like the plc model are fit for the future seems more and more in doubt. Whole regions like the Basque country, Quebec and Emilia Romagna are now already more co-operatively controlled than privately owned.
  • The future of politics. The social shifts this new economy will bring about might unlock a new deliberative and participative budgeting and peer-to-peer politics. What might this mean for the future or demise of centralised party politics? Witness the anger and energy of Los Indignados and Occupy. And the explosive growth of Participative Democracy experiments in places like Porto Alegre and now emerging in the UK and elsewhere. And the growth of new political movements such as La Via Campeina, Spain’s Podemos and Denmark’s Alternative parties and the LIFE Party, ideas around new commons-based political coalitions, a Chamber of the Commons and citizen democracy initiatives like Borgerlyst, Citivox and Partido de la Red.

In some ways the questions these movements and schools of thought are asking are far from new. For instance, JS Mill said that “The social problem for the future we consider to be how to unite the greatest liberty of action with a common ownership in the raw material of the globe, and an equal participation of all in the benefits of combined labour.” But what is new is that, for those of us tuned into these worlds, it feels like there is an insurgent quickening in the pace of innovation and change with many counter-cultural experiments reaching scale in what seems like the blink of an eye.

The future is already here

This might all sound like naval gazing academia. Interesting but at best a sideline to the real business. But despite the denial of the mainstream media, these movements are emerging as a real force to be reckoned with. We are living through revolutionary times with potentially radical changes already underway.

As Harvard’s Professor David Korten puts it “Imagine an economy in which life is valued more than money and power resides with ordinary people who care about one another, their community, and their natural environment. It is possible. It is happening. Millions of people are living it into being. Our common future hangs in the balance.”

But, as William Gibson said “The future’s here, its jut not evenly distributed.” We need far more collaboration if we are going to bring these things to scale.

My hunch is that those who assume we can and will carry on with just a somewhat tweaked business-as-usual are mistaken. And the smarter people in the mainstream are starting to tune into this. Unilever’s CEO Paul Polman, for instance, is involved in a number of these interesting initiatives.

Where next?

Where all of this goes next is up to us. And whether what emerges from the maelstrom of change underway will be ‘capitalist’ or not is unclear. As Jim Stanford of www.economicsforeveryone.com says, “Capitalism represents just one phase (and a relatively short phase so far) in the evolution of human activity. That long process of evolution is not going to suddenly stop. We haven’t arrived at some economic nirvana: a perfect system which can’t possibly be improved. I suspect we’ll end up with something quite different to capitalism: in which most production is no longer undertaken by private, profit seeking companies and most work is no longer undertaken solely in return for a money wage.” 

Churchill wrote that “the inherent vice of capitalism is the unequal sharing of blessings”. Perhaps its time not just for yet another patch or reboot but an entirely new way of doing things in which we finally share out those blessings?

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New peoples party challenges UKIP

This blog first posted on Compass Online 

Its been an interesting couple of weeks in the UK. We’ve seen some of the world’s most powerful people get together to talk about something called ‘Inclusive’ Capitalism and we’ve seen UK politics turned upside down by an extremist party whose values could hardly be less inclusive.

From what I’ve seen and heard about the ‘Inclusive’ Capitalism event it was more about how we save capitalism than people and planet. I’ve asked them if they would be interested in hearing from the non-powerful so we will see if they respond. Those of us involved in the Real Economy Lab, including Neal Lawson of Compass, feel we have quite a few suggestions about how our economics could become more inclusive.

Perhaps UKIP has done us all a favour by showing that emergent new parties can make a real difference to whats seemed like a stale political life.

Perhaps its time for progressives to get their act in gear, dump the dead left-right, state-private dialectic and start a new party – a peoples party. A party of, by and for the people.

Despite the language of ‘peoples army’, my suspicion is that few are fooled by the idea that UKIP represents the interests of wider society. A real ‘peoples party’ would need to properly engage with the hopes, fears, dreams and aspirations of the citizenry, not just pander to our insecurity and feeling of disempowerment which our stale political life has burdened us with.

So what might our new peoples party stand for? Above all it would stand for the 99%, for truly inclusive economics and real democracy.

It might stand for a shift in the current political and economic system towards a peer-to-peer participative, deliberative and socialized control of economic and political life and decision making. This might mean the end of party politics as we know it and certainly the end of the centralized, cabinet-centric, punch and judy world of Westminster. If participative democracy can work in Porto AlegreNew York and Newcastle why not in Margate, Bristol and right across the UK?

This new form of economic-democracy could bring a radical reclaiming of the power of the citizen over that of capital. It might reverse the power structures of capitalism so that labour employs and controls capital rather than the other way round. Associative enterprises along the mutual and co-operative model would flourish and bring power back to the citizen so that we are all vested and invested participants in our economy. If it can work for Emilia Romagna, the US Business Alliance for Local Living Economies, the Quebec Social Economy and communities such as Marinaleda, then why not make this the norm for UK commerce?

Economic democracy like that could liberate the innovation and drive of peer-to-peer, open source wiki-world which is already pushing at (if not way beyond) the boundaries of our old economics system. As Kevin Keely, former executive editor of Wired has said “How close to a non-capitalistic, open source peer production society can this movement take us? Closer than we thought.” Its what Jeremy Rifkin terms a “collaborative commons eclipsing capitalism”, and of which Harvard’s Professor Jim Heskett says “Now questions are again arising about whether we are about to experience a post-capitalist society centered around the creation and sharing of goods and services that have marginal costs approaching zero”.

Perhaps the peoples party could call for an end to the perverse, anti-social, state-finance nexus and for a radical transformation of our finance sector, and an end of the right of too-big-to-fail casino banks to create money into existence out of thin air. We could see a flourishing of ‘patient capital’ in a local, regional and national social-investment web focused on nurturing an economy fit for people and planet not fat-cas. If it can work for German state and regional banks, French regional and mutual banking, for Mondragon’s Caja Laboral and the flourishing credit union space why not for the UK investment sector as a whole?

And how about campaigning for a fairer world in which the interests of the 99% not the 1% were paramount? An unconditional citizens credit, 100% inheritance tax and other fair-share measures could bring an end to the genetic lottery which has concentrated power and wealth in the hands of the few. If the ideas of Picketty and Wilkinson and Pickett have resonated with so many of us, on the left and the right, why can’t we put their ideas into action?

And how about a party which delivered on hug-a-husky, big-society, responsible-capitalism rhetoric and actually delivered a light-touch, enabling state which set the rules of the market in a way that they delivered prosperity and flourishing lives for all citizens without trashing the planet?

A peoples party could deliver on all of this with a popular and empowering vision of a fairer world where the intrinsic values of collaboration trump those of competition, where ‘we are all in this together’ beats ‘every man for himself’, where community counts for more than nationalism, where ‘good lives for all’ becomes the mantra instead of ‘shop till you drop.’

Who might be the first peoples party MPs? Well it might be you or me. It might suit people currently working at the grassroots as community organizers or in things like Transition initiatives. Or those many disaffected MPs in the Conservative, Labour and Lib Dem parties who recognize how sclerotic their party machines have become.

Old dogma and tribalism won’t need to feature in this new politics. It could take the best from the old but update it to the future. It might have echoes of the first version of clause IV from the Labour movement, which was about collective control of power. It could learn from progressive conservative and republicanism instincts. But for the first time in generations it will move us beyond the idea that its either capitalism or socialism which has all the answers and focus instead on something fresh and new.

You might think all of his sounds utopian and other worldly. But elements of all of this actually already exist and indeed flourish in the world around us. We need to collaborate and catalyse, cross fertilize and build a better future out of all of this innovation. That would be the job for a peoples party – to make these dreams a reality.

Now the dog whistle of UKIP has stirred us out of our reverie, lets not let Farage and his sirens draw us any closer towards their solitary, nasty, brutish ways. Lets chose a better way, lets make an opportunity out of a crisis. Let the 99% take back control.

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Economic (and Other) Impossibilities for Our Grandchildren

This blog first posted on Huffington Post

A 2013 Pew Center opinion survey of 39 countries found that only 33 percent of Americans and 17 percent of Brits believe their children will live better lives than they had. And evidence of our imminent freefall into climate chaos and “debtonation” suggests that they are right to be so pessimistic. Indeed, for the first time in human history life is now likely to be worse for our grandchildren than it has been for us.

That’s a sobering thought. It’s the end of the post-Enlightenment narrative and paradigm of ‘progress’. As Noam Chomsky is saying, things aren’t getting better any more. They are getting worse.

In his 1931 Essays in Persuasion, Keynes wrote an essay on “The Economic Possibilities for our Grandchildren.” He predicted a time when humanity would overcome its scarcity problem and the accompanying psychology of self-interestedness. He was talking about 2031 and I guess its possible things might improve by then. Currently though, the direction of travel is in the opposite direction, with greed and avarice of those 1 percent in power on the increase and equality for the 99 percent on the decrease. Combine that with a myopic growth obsessed economics and it makes for an Unhappy Planet. Indeed 2031 is the date some climate analysts predict as being game-over for humanity based on our current trajectory.

And lets be clear, the blame for this mess we are in lies with those of us who are already adults. We’ve had it good. At least those of us over-privileged few who have computers, read blogs, have jobs, can make ends meet. Many of us have probably had the most comfortable lives ever lived. But as a society we are asleep at the wheel. And our apathy is to blame for the reckless way society is currently set up.

Two years ago I wrote a blog, “Daddy what did you do when the earth was unraveling?” just after I had my first child. I’ve just had another child. I think bringing a new life into this uncertain world scares me. In fact it scares the hell out of me. It also makes me more and more determined not to allow those in power, the cynical, the selfish, the apathetic, to get away with it any longer.

Because it does not have to be all doom and gloom. We could (maybe) still avert the freefall into climate chaos if we all step up, be counted, make our stand and push for radical change in the way our economy is run. We need a new economicswhich puts the well-being of people and planet at its heart instead of power, inequity and plunder. The building blocks of this new economy are already out there. We just need to nurture the good stuff and kill off the bad.

There are great examples of what Polanyi called the ‘double movement’ — of society fighting back against the destructive forces of an untamed market. We need to champion these movements and scale them. Be it Los Indignados, Occupy, Bien Vivir, the Commoning, Cooperatives, Degrowth, Maker, Collaborative-Consumption and Transition movements — they and many others, represent elements of a very new way of doing things.

As Kevin Keely, former executive editor of Wired magazine has said of the peer-to-peer economy, “How close to a non-capitalistic, open source peer production society can this movement take us? Closer than we thought.” Jeremy Rifkin hasrecently written of a “collaborative commons eclipsing capitalism”, and Harvard Professor Jim Heskett says, “Now questions are again arising about whether we are about to experience a post-capitalist society centered around the creation and sharing of goods and services that have marginal costs approaching zero.”

That’s why a group of us are launching an exciting new initiative, the Real Economy Lab, to explore, popularize and support the flourishing of a new form of people-powered and sustainable socio-economics.

In 2031, the date Keynes predicted that all manner of things will be well, my daughter will be 19 and my son 17. I’m optimistic that the world then will be a better place — or at least not a worse one. But not just for them, for all of humanity. That’s possible and its surely worth fighting for.

But it’s a fair bet that whatever form ‘progress’ or prosperity takes in the future, it won’t be defined by our current paradigm’s measures of wealth and growth. My hunch is that, if we make it out of our current nosedive, we will have moved on from what we call ‘capitalism’ and our current formulation of ‘democracy’ to new forms of peer-to-peer, participative, collaborative and co-operative politics and commerce beyond ‘growth’ as its narrowly defined today.

Exciting times. Vive la Revolution.

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Project Sunlight and the Journey to Intrinsic Values

This blog first posted on Huffington Post

Unilever’s innovative Project Sunlight platform has attracted lots of blogosphere attention and sometimes criticism. The headlines of the criticism are that Unilever fails to fully recognize the distinction between the consumer and the citizen — between extrinsic and intrinsic values and between real well-being — needs and created consumer “wants.” Without making this distinction, the argument goes, brands are not going to successfully take their customers on a journey to more sustainable and flourishing lives.

This blog gives the highlights of a longer think-piece I have written which examines these questions in more detail.

The best customers are citizens not consumers.

In Citizen Renaissance we describe a consumer-citizen continuum. At one end of this sits an archetypal “perfect consumer” whose life is largely mediated through and dominated by what are know as extrinsic values, like financial success, prestige, authority, individualism and materialism. Think Loadsamoney crossed with Gordon Gekko.

At the other end of the spectrum is the “perfect citizen” whose life is mediated through and dominated by intrinsic values like community, affiliation to friends and family, connection to nature, concern for others, social justice and creativity. Of course few of us perfectly exhibit the characteristics of either of these extremes, and in fact we know from the values-circumplex work of my colleague Dr, Tom Crompton, Change Strategist at WWF, and of Professor Tim Kasser, that we all have a mix of these values in our make-up. It is largely things like upbringing, advertising and societal norms which mediate where we sit on the spectrum or circumplex.

The “perfect consumer” has a lower well-being than others, lowers the well-being of those around them, has a higher than average environmental footprint and is more closed than others to pro-social and environmental behavior change messaging. The “perfect citizen” has higher than average levels of wellbeing, lower environmental footprints, and are far more open to pro-social and environmental behavior-change messaging.

So, to be a sustainable company, you certainly don’t want “perfect consumers” as your typical customer. You want to take customers on a journey to being closer to the “perfect citizen.” In short you need to think of them, and treat them as if they are citizens not consumers.

Understanding this distinction in values will support development of products, services and brands that help take current and prospective customers on a journey towards these sets of citizen-centric values and maximize the ecological efficiency of well-being-needs satisfaction.

An added dividend in terms of brand relationships is that these intrinsic values are long-held and deep-held, whereas extrinsic values are fickle, short-term and shallow. So if you want a deeper, more durable brand relationship with your customers, you really want to be communicating in intrinsic terms.

How does Project Sunlight measure up?

Some of the messaging on the Project Sunlight platform is indeed talking to us as citizens and tapping into and reinforcing intrinsic values and wellbeing-enhancing practices. Take the “spend quality time together” story that resonates with well-being vectors like “connect” in Nef’s five-ways-to-well-being, and to “community,” “participation” and “love” well-being needs in Professor Manfred Max Neefs nine-ways-to-well-being. In values terms the messaging around “spend quality time together” connects to intrinsic “benevolence” values like love, friendship, loyalty and spiritual living. Other messages in the Project Sunlight portfolio link to intrinsic “universalism” values like respecting nature and social justice.

So there is much in Project Sunlight that is heading in the right direction. But critics are saying that Project Sunlight ultimately suggests we can shop and consume our way to utopia, that it mixes calls to action associated purely with the consumer side of our psyche in with more progressive messages. It is suggested that this risks undermining the overall effect of the Project Sunlight campaign and set up a cognitive dissonance which at best will freeze us into confusion and inaction, but more likely send us scurrying back into what we know – extrinsically orientated consumerism, atomized, individualistic actions and the hedonic treadmill.

This is echoed in a blog on Project Sunlight, talking of the “incoherence of Unilever owning both Lynx/Axe and Dove,” which concludes “It is possible for brands to talk to us as citizens, and build loyalty and value by treating us with that level of respect. But Unilever are not doing so yet.”

Many people seem to be saying they are left with a “so what” feeling after taking a good look at Project Sunlight. Not only does it often speak to us as consumers rather than as citizens and fail to take us consistently and clearly on the consumer-citizen values journey, it also seems to make the mistake of thinking that, despite the evidence, a “small steps to save the world” approach can be effective.

Don’t get me wrong. I personally think Project Sunlight is innovative and an important step in the right direction. But, as with everything, it can be improved. My feeling is that, without being based on a systematic and consistent understanding of the implications of values and well-being and how they relate to behaviors, Project Sunlight will under-leverage its potential to transform not only Unilever but to redefine the rules of the game for corporate responsibility and sustainability.

In the think-piece which this blog is based on we suggest a number of ways that initiatives like Project Sunlight can understand these issues and become more effective at the consumer-citizen journey.

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Powered by People – who do you trust to keep the lights on?

In this piece originally posted on Compass, Jules examines Ed Milliband’s recent outburst on the energy ‘Big Six’ and suggests an alternative, co-operative energy, direction for the UK.

Tired of bashing bankers? Have a go at the ‘Big Six’ energy companies instead – always a good formula for a popularist message. That’s the tack Ed Miliband has taken with his latest headline-grabbing speech.

Miliband’s promise to freeze energy prices may please consumer groups but right-wing commentators have jumped at the chance to again portray him as “Red Ed” while energy companies are unsurprisingly up in arms. Even more controversial than price controls, are suggestions of breaking up the energy companies and increasing the control central government has over their activities.

Levels of trust in energy companies, for both the public and MPs, is pretty much at an all-time low. So clearly something needs to be done to restore this trust. But does Miliband’s rhetoric fill one with confidence that he has a thought-through vision of a secure, low carbon energy market? Does he have a plan and a narrative and the willingness to deliver on it?

As James Langdale suggests, this attack on the energy companies feels like old-school, left-wing, ‘state knows best’ tactics. But, in reality, Miliband is stuck between a rock and a hard place. Whilst he sees the need for some sort of reform in markets and economics, he defaults to a middle-ground which is neither free-market, nor true to the ideals and origins of the labour movement.

This is because Miliband triangulates everything he does and thinks off his reaction to, and repudiation of, his father’s ‘nationalise the means of production’ and public-ownership version of socialism. In his rush to refute this form of socialism, he makes vague threats about shaking up energy markets with no vision of what alternative end he seeks and what real means he will use to get there. So whilst he dislikes the effects of liberalisation, he is not sure what to do instead. All he is sure about is that he can’t be seen to be too ‘red’ and too much like his father.

But this is to misunderstand a crucial aspect of the labour movement’s and the Labour Party’s heritage. Whilst in Ralph

Miliband’s days, Clause IV – and therefore the Labour Party – was firmly rooted in nationalisation as the means to socialisation of the economy, this was the 1944 re-write of Sidney Webb’s original 1918 Clause IV.

What Ralph may have forgotten – or deliberately ignored – and what Ed is missing, is the original wording of the 1918 version of Clause IV which wasn’t about nationalization and public ownership at all, but about the mutualisation of the economy and common ownership. The text ran:

To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange.

Fast forward with that 1918 text to today and that wording could mean community and employee owned energy. It could mean collaborative consumption, land trusts, credit unions, mutual finance, peer-to-peer enterprise, crowd-funding and the flourishing of ‘the good society’ where the citizen not the civil servant is king.

So how about, instead of bashing the energy companies for the sake of headlines, Miliband listened to Ian Marchant, ex-CEO of SSE, and now President of the Energy Institute, who has called for a flourishing of community energy projects? Or to the new CEO of the same company, Alastair Phillips Davies, who wants his company to become the John Lewis of the energy sector.

Just as ex oil-man Justin Welby, Archbishop of Canterbury, has called for a the rise of credit unions and a mutualisation of finance in response to the ‘Wonga-isation’ of the finance sector, so mutualism and co-operatisation could play an important role in the future production and supply of decentralised, low carbon, energy.

Just look at the way the big energy companies in places like Germany are under pressure from the rise of community rooftop solar projects. That’s a sign of power relocating to us, the people.

Set the market framework correctly and Clause IV v1 could become a reality here in the UK. Workers and communities could become vested and invested in the future of a secure low carbon economy.

Yes, the role for ‘Big Six’ companies might change; the market might need breaking up or rearranging in some way. But don’t take a mallet to the system. Work with the energy companies to make this a reality. Set the right market framework and let innovation and enterprise deliver outcomes, not byzantine procedures and Kafkaesque regulatory minefields.

Labour badly needs a vision if it is to stand a hope in hell of influencing or gaining power. But what we need is not the clunking fist of centralised power and quangos – it’s people-power.

The sooner Miliband and everyone in Westminster realises this, the better for us all.

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Wellbeing=Good Business?

In this piece originally posted by Hufftington Post, Jules asks why it is that a focus on wellbeing is becoming central to strategic innovation for progressive businesses.

When you see the likes of Sir Richard Branson, Arianna Huffington, Paul Polman, Ratan Tata, Dr. Mo Ibrahim, Francois-Henri Pinault, Professor Muhammad Yunus and Jochen Zeitz call for a refocus of business towards well-being you know that change is afoot. Well-being? It all sounds a bit fluffy for hardcore business leaders, doesn’t it?

So what might these B-Team Leaders mean when they launch with a headline commitment to help create a world where business is used as “a primary driver of holistic well-being, adding social value through evolving business models, employee welfare, health, citizen engagement and human rights”? And what might Paul Polman’s company Unilever mean when its Sustainable Living Plan commits to improve the well-being of one billion people by 2020?

Let me take you back to the build up to Rio ’92. In 1987, the UN Brundtland Report defined what ‘sustainable’ development was all about as development which meets the needs of current and future generations within the limits of the planet. In other words, there are two lenses to sustainable development: to be sustainable, development has to focus on satisfying human needs while respecting natural limits. Until now, however, most corporate sustainability has focused on only one of these two lenses, the planetary limits, and has missed the far more crucial question of human needs. This is where well-being comes in.

There are various ways of understanding human needs, those things and circumstances we require to flourish, to have high levels of well-being. Most of us know Maslow’s hierarchy, with basic material needs at the bottom and non-material psycho-spiritual ones at the top. The problem with the way we live today is that we’ve heaped much of our material use (and resulting pollutants) at the top – in the non-material needs area. In an age when we know we are living way beyond safe planetary limits, it seems crazy and profligate to be wasting scarce materials to try, often unsuccessfully, to satisfy these non-material needs.

We all know intrinsically that money can’t buy us happiness, as Professor Tim Jackson says of our current ‘insatiability doctrine’ in his brilliant TED talk, “We spend money we don’t have on things we don’t need to impress people we don’t even care about.” So what are the key ways to attain well-being? Well, once our basic material needs for food, warmth and the like are met, the key headline things which increase well-being – the ‘five ways to well-being’ are connection to friends, family and community; giving back and volunteering; being physically active; having life goals and continuing to learn; and taking notice and being engaged. Behind those five-ways sits a more complex matrix of what are known as well-being-satisfiers developed by an economist called Professor Manfred Max-Neef. But lets not get all technical here. What can business do about all of this?

At Jericho Chambers, we’ve developed a process called WellbeingNeedfinding which is based on insights from user-centered-design, positive psychology, well-being and welfare economics, theories of human needs, hedonomics and neuroscience. This strategic innovation process helps companies map, measure, manage and maximize the well-being-satisfaction their brands, products and services can provide to customers and society. It’s based on unpacking and understanding the real well-being-needs of customers and either mapping current products and services against that landscape of needs, or innovating with new products or services which can satisfy those needs in an ecologically optimal manner.

With leadership from progressive business, we should be able to satisfy the material and non-material well-being-needs (though not the created ‘wants’) of nine billion people. But to do so will require business to think very differently about its role and how it operates. That’s why at The B-Team, we understand that the sustainable business of the future, the future bottom line, the future of leadership and future incentives will all need to be defined by their ability to ecologically-efficiently satisfy our well-being-needs.

As Sir Richard has said: “We have no planet B.” It’s time to live as if we recognize that, and time for business to view everything it does through the lens of satisfying well-being-needs, while respecting the limits of this one, beautiful planet we are so privileged to live on.

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The future of business: what are the alternatives to capitalism?

In this Guardian blog, Jules Peck asks what the implications of limits to growth are for capitalist theory, the alternatives, and what it means for business

Karl Marx

Mainstream commentators are questioning growth-obsessed capitalism and revisiting the ideas of Karl Marx.

 

Evidence shows its very clear we have reached the safe limits to growth in terms of the most pressing threat to human civilisation – that of a stable atmosphere.

Therefore, until we can find a way to decouple growth from carbon emissions and reach that mythical “dematerialised” economy, restarting global economic growth seems a dangerous folly. But what might the implications of this be for capitalism?

Limits to growth and their implications for capitalism

It’s generally agreed that capitalism has three key principles; the majority of “the means of production” (land, resources, capital) are concentrated in private hands; the majority of us work for a wage (ie for other people); and markets are used to mediate between producer and consumer (set prices, etc).

I’ve blogged elsewhere about the problems of the first two, not least of which is an addiction to growth. Put simply, it seems that capitalism cannot be compatible with continued exponential growth on a finite planet. As Tim Jackson has said, “Simplistic assumptions about capitalism’s propensity for efficiency are nothing short of delusional. A different kind of economics is needed.”

In any case, its no longer heresy to point out that capitalism has serious flaws. Indeed, mainstream commentators are questioning growth-obsessed capitalist economics and calling up Karl Marx from his grave.

Both Marx on the left and Schumpeter on the right long ago predicted the end of capitalism. And recently fund manager Jeremy Grantham said: “Capitalism… is totally ill-equipped to deal with a small handful of issues. Unfortunately, they are the issues that are absolutely central to our long-term wellbeing and even survival.”

Finding alternatives beyond capitalism

Jonathon Porrit is right when he says “it seems most improbable that capitalism will prove the last word in humanity’s organisation of human affairs…” But he is wrong to say that capitalism “…is all that is credibly on offer at present”.

There are many alternatives to capitalism. You can be excused for not having heard of them, though, as they don’t shout as loudly as capitalism.

One alternative, Professor David Schweickart’s Economic Democracy, socialises control of enterprises and the means of production, placing resources, factories and other productive capital into the hands of the people and away from the short-term interests of both the state and private sector. Crucially, Schweickart argues this form of economics would not need to rely on growth.

Business beyond capitalism – socialising profits and risks

Professor David Harvey says our economics “privatises profits and socialises risks”.

What would it look like if we shifted to a system that socialised both the profits and the risks, in which we all shared the good and the bad?

Under the vision of economic democracy, workers would control most enterprises democratically. To change to this form of enterprise structure, legislation and subsidies could support us to buy the companies we work in through labour trusts and leveraged buyouts, coupon-based markets or “share levies” on corporate profits.

Bankrupt companies (like RBS) would be restructured as worker self-managed. Enterprises like Spain’s Mondragon Co-operative Group, the UK’s Co-op Group and John Lewis, with revenues of £14bn, £12bn and £11bn respectively, have been shown to be more efficient than most private companies. State-wide examples of co-operative economics include the Quebec Social Economy. Other mass-collaborative forms of enterprise include what has been described as the “fundamentally anti-capitalist” Wikipedia.

Workers would control (but not own) the enterprises they work in and, after paying a “capital assets tax” (a sort of rent) on revenue-generating property, any surplus would be divided democratically between them.

Not all of the “means of production” would be socialised, entrepreneurs would need to be encouraged to start up new enterprises. So that the majority of enterprises remain democratically controlled, any privately owned companies could only be sold to the state, which would then put them into the control of the workers. Likewise, when a private company owner died their beneficiaries might have to sell to the state, again for the enterprise to be placed into worker control.

Enterprises would still interact with one another and with consumers in a market driven by the forces of supply and demand. Innovation and entrepreneurial activity would flourish. This economics would not tend to the need for hyper-consumerism and industry could be guided by market frameworks that shift enterprises from seeing products themselves as benefits to seeing production as a cost of delivering to real (not created) wellbeing needs.

Financial capital would also need to be socialised. The right to create money could shift away from private banks and into the hands of the people via democratically run national banks. Local credit unions could provide for personal credit, but the majority of investments – those made in business – would cease to rely on private funds. The corporate capital assets tax would be paid into an investment fund which was then distributed as investments for future enterprise creation or expansion. We could entirely do away with the private investment sector.

A network of public or co-operative investment banks at national, regional and community level could provide investments and business development services, as does Mondragon’s bank. Funds would be given out on the basis of sustainability and job creation and driven by bottom-up direct democracy, with citizens’ assemblies, participatory governance, budgeting and planning processes similar to those used by places like Porto Alegre in Brazil and now emerging in the UK.

Plan for alternative economy

Whether or not capitalism (in some form or hybrid) can make the grade is still up for debate. But we ought at least to be asking questions about its compatibility with long-term sustainability.

What we are talking about here moves us on from binary, dead dialectics of left versus right, society versus markets and state versus private. Alternative economics could provide sustainable economic development – good lives for all within the limits of our one planet. But the change needed might be radical and vested interests will fight it.

As well as the above ideas, many other changes should be considered, including other alternative economic paradigms and measures such as ending perverse subsidies, land tax reform, absolute caps on emissions, unconditional basic incomes, 100% inheritance taxation, community land trusts, cap-and-share systems and Teqs, to name just a few.

A well thought-through plan for an alternative economy might well come in handy when one day very soon the realisation dawns on society that we badly need a plan B.

As Thomas Carlyle once said: “If something be not done, something will do itself one day, and in a fashion that will please nobody.”

Jules Peck is a director of Flourishing Enterprise, a Trustee of the new economics foundation (nef) and on the advisory board of Richard Branson’s B Team. Jules is involved in a civil society and business inquiry into the issues raised in this article. To get involved, please contact Jules for more information.

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Three (more) things they don’t tell you about capitalism

Professor Ha-Joon Chang has two things in common with Karl Marx. Firstly he’s right in much of his economic analysis of the ills of capitalism and secondly his prescriptions of the solutions to these ills are lacking.

Chang’s best-selling book 23 Things They Don’t Tell You About Capitalism is a timely and important addition to the most crucial debate of our age. I recommend it as both a good read and helpful resource. But I think his analysis missed out three final and far more crucial ‘things’ to his 23.

Aside from giving an incomplete analysis of the ills of capitalism, Chang’s work fails in that the ‘things’ he misses out (my ‘things’ 24, 25 and 26) are the ones which show both that capitalism is fatally flawed and ireformable and that an alternative is indeed both possible and viable.

So Chang’s book is both an incomplete picture of the problematique and a flawed vision of the future. It fails to take us beyond the desperate attempts to shoehorn the needs of people and planet into the fundamentally broken and misconceived economics of capitalism.

What’s supposedly so great about capitalism?
Whilst Chang is not arguing for an overthrow of capitalism he is scathing of our current neo-liberal version of it. For each of the 23 ‘things’ he starts with a short ‘What they tell you’ section laying out myths he then debunks. These myths are the sales-pitches whose combined narrative persuade us that we can’t possibly live without capitalism.

We are told that society does best where the interests of shareholders, not wider stakeholders’ are born in mind. But Chang refutes this in ‘thing 2’. We are told that capitalism is the best system because it rewards those who are most productive. But in ‘thing 3’ Chang clearly debunks this myth. We are told that capitalism is the only system capable of producing the kinds of things we so badly need – like yet another version of the ipad. Again Chang debunks this in ‘thing 4’. We are told that individuals are inherently self-seeking and cannot co-operate (‘thing 5’) and so we need the market to ensure the highest wellbeing for society. Again this is debunked well and truly by Chang and numerous others.

Another common rationale for capitalism’s value are that only through continuing ‘creative destruction’ and economic ‘progress’, as defined as never ending growth, can we hope to satisfy human needs. The red-in-tooth-and-claw, ever competitive, ever striving for ‘more’ which is key to capitalism’s accumulation drive, is vital to ensure our wellbeing. Otherwise life would sink into a morass of Leviathan-esque life “solitary, poor, nasty, brutish and short”.

But these things are not true. Man can be co-operative and live in reciprocal manners. We are not rational, but we are not entirely irrational either. And the roles which the capitalist mode of production has given us, of labourer and capitalist, are far from the only natural order of things. Perhaps we no longer need to be dictated by the booms and busts of ever-striving profit and accumulation? Perhaps we can all be worker and boss? Perhaps we can plan our economies to serve the interests of all, not just of the 1%?

What Chang got right with his 23 things
Chang is correct about many of his ‘’things’. There is no such thing as a free market (thing 1), and so called ‘free-market’ policies cause far more harm than good, creating huge public bad and few public goods (things 6 and 7).

Companies should not be run in the interests of shareholders (thing 2). We are not smart enough to leave things to the market (thing 16), in any case our best markets are already very much planned economies (thing 19) and indeed more state-led markets give the best outcomes (things 12 and 21).

All of these challenge the underpinning narratives that keep capitalism ‘credible’ (to some). The next three ‘Things they don’t tell you about capitalism’ suggest that an alternative to capitalism is both needed and possible.

Thing 24 – Growth does not equal happiness

Ever increasing economic growth (the rational for capitalism) long since ceased to bring increasing marginal returns to wellbeing. In the ‘rich world’ wellbeing has flat-lined since the 1970s. So in fact, all the extra growth and wealth we have accumulated since the 1970s could be distributed more fairly and could arguably satisfy all the basic needs of the worlds 7bn.

A few facts might help to make this point. The combined wealth of the world’s 500 wealthiest people is equal to that of the bottom 60% of the world’s population. The top 1% in the US have more wealth than the entire bottom 90%. Just one of these individuals’ wealth – say Warren Buffett’s – could increase the wealth of 1bn of the world’s poorest people by around 20%.

So the key rationale and driver of capitalism, the ‘treadmill of accumulation’ makes no sense any more. We don’t need to keep accumulating and transforming the natural world into yet more ‘stuff’. We can share out what we have already and merely replace that in a sustainable manner as needs be. So whatever form of economics we might need, we don’t need capitalism and all its ills.

Thing 25 – Limits to growth
We have reached the limits to economic growth on which Capitalism depends. Just in terms of climate change, as we show in this blog, we need to halt, and in the rich world find a reverse gear for, any further expansion of the global economy.

Chang does touch on issues of environmental limits in his book. But he fails to understand how fundamental these challenges are to capitalism’s expansionary dynamics and urgently we need to respond if we are to save humanity from unliveable conditions.

Combine these two things, ‘thing 24’ and ‘thing 25’, and you start to see that there is no real need for capitalism anymore. It is neither necessary for satisfying our wellbeing needs, nor is it possible without plunging our one and only planet into a state which would fundamentally undermine the needs of our children and future generations. So capitalism comes with numerous attendant ills and yet it is not even necessary.

What is missed by ignoring ‘things’ 24 and 25

What Chang misses is that the downsides to capitalism and its myths are in fact the inevitable outcome of the dynamics of the ‘treadmill of accumulation’ and the ‘capital surplus absorption problem’. These negative effects of capitalism are not just unfortunate by-products of a misfiring engine. In many ways they are the engine.

Inequality and poverty, consumerism, deb-tonation, polluted values, the rollercoaster of boom and busts economics the creation of dangerous financial products. All of these ills and more are the direct and inescapable outcomes of capitalism on a finite planet.

Chang is either unaware of what we now know about wellbeing and natural limits or he ignored these factors because they would not have fitted with his desire to find a way to save capitalism. In ignoring ‘things’ 24 and 25 it is possible to assume that we might ‘make capitalism nicer’. If all that extra growth and ‘stuff’ fulfilled our lives and if we lived on an infinite planet then maybe ‘nicer/greener’ capitalism would be possible.

This badly underestimates just how non-negotiable are the core characteristics of capitalism. It is these core characteristics of the absolute and never-ending requirement for capital-accumulation and profit which cause the many ‘things’ he lists. But he assumes that these 23 ills can be assuaged by tinkering with the operating system, a patch here and a patch there. What he misses is that these patches will do nothing to confront the reality of ‘thing 25’ – absolute limits to growth.

And because he is not aware of the alternatives to capitalism, (thing 26) and how much better they can deliver prosperity and ‘good lives for all’, his thinking and horizons have been self-limited and constrained. We should not let our own horizons be so constrained.

Thing 26 – There are alternatives to Capitalism.
So what of the alternatives?

Time and time again we are told by otherwise thoughtful people that ‘there are no alternatives’. But this is wrong. There are many alternative visions and forms of economics around. They might not be as well PR’ed as capitalism. But then that’s hardly surprising since capitalism works well for the world’s most powerful men – who happen to own much of the world’s media.

Beyond-capitalism economics already exists in pockets of experimentation around the world. The most obvious of this is perhaps the co-operative movement which, along with State Owned Enterprises (SOEs), already makes up a significant proportion of the economy.

You could call this new economics ‘Sustainable Wellbeing Economics’ or, as Professor David Schweickart calls it in After Capitalism, ‘economic democracy’ and ‘democratic socialism’. Or, as Professor Erik Olin Wright calls it In Envisioning Real Utopias, ‘participatory democracy’. The name does not matter. What does matter is that it is built around the principles of the need for a democratic and sustainable model of economic ‘progress’ or ‘development’, which most equitably satisfies the human needs (not wants) of all 7bn of us.

Whilst there are no blueprints for such an economics there is a huge amount of work which has been done by people like Schweickart and Olin Wright as well as others like Professor David Harvey (his Enigma of Capital is another must-read). All three of these are distinguished academics at leading US Universities. And their work is far from just academic. It is based on extensive examination of real, existing and emergent elements of this new form of economics.

Time for change
Capitalism is not beautiful”, said John Maynard Keynes. “It is not intelligent, it is not virtuous and it not just. But when we wonder what to put in its place, we are extremely perplexed.”

We can no longer stand by in a perplexed manner as capitalism causes civilization to nosedive into the ground. Allowing capitalism to continue to collapse in an unplanned way will be painful. As Thomas Carlyle put it, “If something be not done, something will do itself one day, and in a fashion that will please nobody.

In fact we no longer need to stand by perplexed. We know far more than was known in Marx’s or Keynes’ day. We have the benefit of years of experimentation with capitalism, markets, state planning, co-operative and ‘commoning’ movements. From the work of countless Nobel Laureates we know far more about the bounds of human rationality, about reciprocity, behavioral economics and game-theory, about welfare and wellbeing economics, about the possibilities and limits of human ingenuity and technology.

Its time for us to set aside our fears of going beyond capitalism, a system we have got so used to and so mesmerized by, that we have become blind to its faults and its alternatives.

As Einstein put ”Insanity is doing the same thing over and over again and expecting different results.” Or, as Professor Tim Jackson has said “that ecological damage should be the result of a series of consumption practices which clearly fail to increase wellbeing has all the characteristics of a social pathology.”

It is time we proved ourselves sane and dared to dream of, and develop an alternative.

I’ll finish on a quote from Professor Chang’s conclusion in ‘The 23 Things They Don’t Tell You About Capitalism’,

Nothing short of a total re-envisioning of the way we organise our economy and society will do.”

 

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Citizen Economics Beyond Capitalism: Stealing Back The Commons

Michael Jacobs, an ex-SpAd to Gordon Brown, has recently written in the New Satesman that ‘green social democracy can save capitalism’. Well, not everyone agrees. For some, the ‘green social democracy’ experiment has, thus far, not worked, and indeed, might be running out of time.

And as for capitalism – or at least capitalism1.0, it’s no longer heresy to question its infallibility. Since I last blogged about capitalism, a host of mainstreamers like the BBC’s Stephanie Flanders, the FT’s Martin Wolf, UBS’s George Magnus, Joseph Stiglitz and Nouriel Roubini, have started questioning our growth-obsessed, capitalist economics and calling up Karl Marx from his grave.

And, as a search of Amazon will show you, there’s no shortage of recent books both questioning capitalism and laying out ideas for its updating or replacement.

But why might we have to consider alternatives to capitalism and what might an alternative look like?

Limits to growth

As we’ve mentioned often on this site, people like Professors Tim Jackson and Herman Daly has shown that, due to the scale and urgency required to tackle things like climate change, technological solutions to ‘decoupling’ growth from carbon emissions are nothing short of delusional.

So its becoming clear that continued growth of the macro economy would push us into climate meltdown and commit the world’s poorest and our children to unthinkable trauma. As someone I’m now working with, IPCC scientist and Deputy Director of the Tyndall Centre Professor Kevin Anderson, recently said, “we can either deal with climate change or have a growth economy – not both.”

Economist Kenneth Boulding famously said pretty much the same thing, now being repeated by finance brokers Tullet Prebon, “to believe in infinite growth on a finite planet you have to either be an economist or a madman.” In any case, whether we want to keep growing or not may be out of our hands, as writer Richard Heinberg points outgrowth is over, like it or not.”

The good news is that emerging macro-economic modelling from the New Economics Foundation (Nef) and by Professors Peter Victor and Tim Jackson is showing that an end to global economic expansion needn’t stop us delivering high employment, high wellbeing and fiscal balance.

In other words, there is hope that the rich world can well afford to find a quantitative reverse gear so that the poor world can hopefully continue to develop qualitatively.

But what are the implications for our current economic-incumbent capitalism?

Some would argue that capitalism has played a role, along with other forms of market and non-market socio-economics, in historic improvements in material and non-material wellbeing. But capitalism brings with it endless ‘externalities’, as historian Mike Davis argues in the fascinating Late Victorian Holocausts, Millions died in the golden age of Liberal Capitalism; indeed, many were murdered … by the theological application of the sacred principles of Smith, Bentham and Mill.”

For todays ‘full-world’ challenges, a new, or radically updated system is needed. This new economics will need to deliver two key things. It will need to deliver wellbeing to all, current and future generations. And it will need to do that sustainably. Call it ‘sustainable wellbeing economics’.

The problem for capitalism, as it jockeys for position as our preferred economic model for the next 300 years, is that it relies on continued and exponential economic growth to support the dynamic of profit maximisation and the ‘treadmill of accumulation’.

Attempts at incremental reform of capitalism – Michael Jacobs’ ‘green social democracy’ and other models such as ‘market ecology’, ‘natural capitalism’ and ‘capitalism-as-if-the-earth-matters’ have failed. Eco-socialists will say they were always doomed to fail. Others that they might have worked if given more time.

But time is something we don’t have. NASAs climatologist James Hansen says “we may already be too late’. Kevin Anderson that, without urgent change we’re locked into 4 degrees of warming[1]. As we blogged recently, that’s scientist-speak for apocalypse.

As our current economics continues to unravel towards ‘peak money’[2] and social unrest, with the pain of real austerity hitting Greek citizens, and with the Red Cross giving out food parcels in Spain, where there are now 2.3m ‘vulnerable’ people, many are asking ‘are we next?’

There are of course alternatives to pure free-market capitalism. Red-in-tooth-and-claw Anglo-Saxon capitalism is just a more extreme version of variants such as European Social Democracy, Asian mixed economy and Keiretsu capitalism. But no form of capitalism has ever been able to sustainably provide ‘good lives’ for all. And certainly never been able to, nor could ever, operate without growth.

Res Communes – sustainable wellbeing economics of, by and for the citizens

I’m involved currently with a group of people from the Transition Towns movement, Nef and elsewhere which is developing a draft document which we plan to put online as an open-sourced wiki manifesto. The idea is that anyone out there will be able to help us fill in the gaps.

It’s a vision of economics which is very much in the ‘for, by and of the people’ heritage and its been inspired by the work of Nobel laureates like Ostrom, Stiglitz, Sen and Kahneman, and the work of Manfred Max-Neef, Peter Barnes and Tom Crompton, amongst others. Their work has been updating our understanding of socio-economic relations, values, co-operation, the commons, reciprocity and wellbeing and pointing the way towards alternative forms of socio-economic relations beyond growth and capital-ism.

In line with the commons/state/private sectors of ancient Rome, this new economics Res Communes economics would aim put the citizen centre stage of a socio-economic transition to a resilient, mutualised, co-operative, communitarian, localised and participatory democracy, with a radical shrinking away of the short-termist private, Res Privita and state, Res Publica sectors.

Transitioning to this new form of economics will have wide ranging implications including for everything from social relations, equity, cultural values (from extrinsic to intrinsic wellbeing satisfying values), new visions and narratives of ‘prosperity’, commercial, national and international accounting, the balance between ‘use’ and ‘exchange’ values, and the end of a debt-based monetary system.

To see how elements of this are already emerging, witness the flourishing participative democracy and budgeting movement pioneered in Porto Alegre Brazil and now taking hold in the UK and elsewhere.

We should rightly question everything about our current economics. If elements can’t be compatible with sustainable wellbeing economic principles, then they ought to go. Even currently construed shibboleths such as markets will need to prove they can be our slave not master if they are to make the grade for the transition to this new economics.

Elements of this new Res Communes economics already exist

There are many new and old forms of alternatives to the shareholder-owned enterprise model that are showing the way forward. Take the countless mutual, employee, community and cooperatively owned enterprises which include some of our best-loved enterprises like John Lewis and Waitrose. There is no reason why we could not all work for, buy from and own such enterprises which can live beyond the growth obsessed profit motive.

Witness the Buen Vivir movement championed by Evo Morales and the flourishing commons and ‘commoners’ movements that, as commons-guru David Bollier of puts it, is repudiating “the corruption of the market/state duopoly”.

Take Spain’s £4.3bn Mondragon Co-operatives Group, with 53,000 stakeholder-owners. The World Bank has said that, for over twenty years, Mondragon was “more efficient than many private enterprises…. there can be no doubt that the co-operatives have been more profitable than capitalist enterprises.”

Indeed, some of our best loved enterprises in the UK are co-ops such as John Lewis and Waitrose and the mighty Co-op Group which, aside from its food and farming markets is now representing a healthy threat to the myopic privately owned banking system which has done so much harm to society. And think of perhaps the world’s most successful and well known commons-based, collaborative, non capitalist, participative enterprise – Wikipedia – with over 7m entries and used by 2m people a day.

These sorts of successes are showing that the idea that profit maximising, shareholder-owned capitalist enterprises are far from the only alternative. Maybe some day soon we will all work for, own and buy from similar enterprises.

Implications for the left

Perhaps the time has come to move on from the tired, left-right dialectic of state-versus-market, capitalism versus communism. Nether state nor private ought to have the upper-hand. In a truly participative economic democracy it should be the people and the notion of the commons which calls the shots. This will have huge implications for politics.

As this is fundamentally a change-manifesto, which recognises the current system is badly faulty, its not necessarily going to be an easy agenda for conservatives. But for the left, for whom this ought to have been home-turf, these changes represent an exciting opportunity for renaissance.

Despite Blair’s dragging of the Labour Party across to the right of centre, Labour could once again find its roots as the party of the people. Its worth remembering that Clause IV, despite its characterisation as wholly and dogmatically about nationalisation and state control, was in its original 1918 vision in fact about common ownership. The text ran:

To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.”

Only after 1944 did Clause IV firmly become a policy of nationaliation. If the Labour Party had stuck to its earlier vision and explored opportunities beyond both state and private, we would not have had to put up with the traumas of Blairism.

So if the Labour Party in the UK stands, and deserves, any chance of finding a solid footing and rising to the challenges of our time, then a vision of Res Communes ought to be central to its reinvention.

Reason for optimism

There is reason to be optimistic. Growth long since has failed to deliver increases in life satisfaction for those in the rich-world. We need not fear the end of growth and a new post-capitalist economics. It’s an exciting time to be alive – truly revolutionary changes are afoot.

 

There’s a C17th poem which starts:

 

The law locks up the man or woman, who steals the goose from off the common, but leaves the greater villain loose, who steals the common from off the goose”.

 

Perhaps its time we stole back the commons?

 



[1] http://www.indymedia.org.uk/en/2012/11/502496.html

[2] http://transitionculture.org/2012/04/27/a-report-on-peak-money-and-economic-resilience-a-transition-network-one-day-conversation/

 

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