Real Economics Lab
It is possible to define four schools of thinking and movements currently actively working on critiques of our current socio-economics and elements of alternatives. The Real Economy Lab will seek to use the insights from these worlds, looking to synthesise their various parts so that a new shared vision of prosperity and the economics to underpin it can be developed. We will develop a coalition of organizations to support the shift to such an economics. It is our belief that these organizations and movements are not currently collaborating sufficiently and this is holding us back from a concerted efforts towards a progressive vision and movement for change.
Some initial ideas are discussed in this Guardian blog, this blog and this blog.
It is no longer anathema to question our current economics, nor indeed even capitalism. Legendary fund manager and head of GMO Jeremy Grantham has recently said, “Capitalism does millions of things better than the alternatives. It balances supply and demand in an elegant way that central planning has never come close to. 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.”
But though there is rising consensus that ‘the economic system is broken’, and that we are on the precipice of runaway, unstoppable climate chaos, there is little or no consensus even on aspects of a possible alternative economics to deliver prosperity in a low, or zero carbon world, in part because of a stale dialectic which poses our search for prosperity as simply a binary choice between either the markets or society, left or right, state or private.
Exploring the space beyond the left-right, state-private dialectic
Is there useful space beyond state versus market which might provide a route for society out of its current challenges?
Martin Wolf in the FT wrote that our economics is a system to “Privatise profits and socialise risks”. What might it look like if we shifted to a system which socialised both the profits and the risks, in which we all shared the good and the bad? What if ‘there is such a thing as society’ and we could turn to the power of the people, of collective and co-operative action to explore a new landscape for economics? Has the old left-versus-right, society-versus-market, state-versus-private dialectic and the hangover from the neoliberal world-view where ‘there is no such thing as society, just the market’ clouded debate about what might lie beyond this dead dialectic.
Approaching these issues from a new perspective could open up new space for breakthrough thinking and solutions to the crucial question of how we might we satisfy as many of all society’s wellbeing needs within the limits of our one planet, and what kind of economics and enterprises will we need to do so?
There Are Real Alternatives
There are many, often apparently quite separate schools of thinking and action which are all coming at this basic question from very different directions. These are both formulating critiques of our current socio-economic paradigms and potential alternatives. And yet little attempt has been made to even map these efforts, let alone to categorise them to seek to facilitate cross-fertilisation of ideas and approaches. We believe these various schools of thought and movements need to start to work together and that is the objective of our Real Economy Lab.
We suggest that one potentially fruitful way of categorising this work would be into four main sets of thinking and movements:
1. Work and movements exploring the real nature of ‘prosperity’, ‘good lives within limits’ and flourishing and how this maps with limits to growth, including;
General Sustainable Development thinking seeking more sustainable economic development pathways, Prosperity Without Growth (Professor Tim Jackson), Managing Without Growthj (Prof Peter Victor), Nef (Great Transition, Happy Planet Index, Stewart Wallis et al), Happy City, Action for Happiness, Wellbeing and Welfare Economics (Profs. Sen, Kahneman, Seligman et al), the Peak Oil Taskforce and Energy Return on Energy Invested (EROIE) debate (Heinberg et al), the debate about rebound and limits to decoupling growth from throughputs/impacts, the Steady State and Degrowth movements.
2. Movements of emergent alternative ways of living including;
3. Academic thin king on alternative economic paradigms which seek to socialise both profits and risks across the whole of society, including;
Market-based proposals such as Professor David Schweickart’s Economic Democracy, Social Empowerment hybrids of capitalism and socialism such as the work of Professor Erik Olin Wright, the Market Socialism versus Non-Market Socialism debate, Eco-socialism and Ecological Marxism (Professor John Bellamy Foster et al), Non-Market Socialism proposals such as Michael Albert’s Parecon,
4. Existing experiments with elements of a new economics
Participative Democracy experiments in places like Porto Alegre and now emerging in the UK, the global Co-operative movement and highly successful large-scale enterprise examples such as John Lewis, Co-op Group and Mondragon, B-Corp, CIC and other new forms of corporate structure, state-wide examples of co-operative economics include the Quebec Social Economy, other mass-collaborative forms of enterprise such as Wikipedia, the collaborative consumption and peer-to-peer enterprise space, the Peak Money and alternative currency movements, German state and regional banks, French regional and mutual banking.
Principles of a Real Alternative Economics
This economics will need to be guided by the following principles; justice, democracy, equality, environmental sustainability and a focus on prosperity as wellbeing rather than growth and wealth.
Seeking synthesis through a Real Economics Lab
These various approaches and models need to be combined so that their sum becomes greater than their parts. And this sum needs to be stress-tested with key questions such as how a new economics would aim to satisfy needs within limits whilst encouraging all the innovation, entrepreneurial vigour and dynamism we have become used to. How can a socialisation of our economics bring an end to the downsides of such dynamism whilst still retaining its creativity?
And how might we transition towards such an economics from where we are today, in the teeth of a depression and surrounded by fears of debt-onation, climate chaos ad political uncertainty? What role would civil society, NGOs and GROs (Grassroots Organisations), business and politics play in this journey? In particular what might the enterprise of the future look like?
The Real Economics Lab would seek to understand how these various visions and movements and practical experiments map against each other. Such a mapping could provide a clearer vision both of the challenges we face as well as elements of, if not perhaps even a clear and practical roadmap, to confronting and overcoming these challenges. This understanding can then form the basis for a dialogue between diverse stakeholders who currently have little common language or contacts with each other.
Would useful visions and narratives of future prosperity emerge by cross-fertilising and synthesising from all of the above?
A core group of those already engaged in framing the Real Economics Lab includes Ed Mayo, Secretary General of Co-operatives UK, Stewart Wallis, CEO of Nef, Peter Lipman, Chair of Transition Network, Tony Greenham, head of finance and business at Nef and Transition Networks Trustee, Molly Scott Cato, Green Party, Neal Lawson of the think-tank Compass, George Monbiot, Richard Smith, Kate Raworth, Oxford University Environmental Change Institute and ex Oxfam, Brian Davey of The Foundation for the Economics of Sustainability (FEASTA), Dr Tom Crompton in WWF’s Common Cause program and Jules Peck of Flourishing Enterprise.
This group covers, or is in direct contact with, many of the communities involved in both the above sets of schools of thought such as the Commoning and Degrowth movements.
We also expect to have senior involvement from the UN, EC and WEF.
The how and the what of the Real Economics Lab – a process of dialogue and inquiry, and useable outputs
We will launch a new project – the Real Economics Lab which sets out this landscape and initiates/hosts an inquiry to bring together these schools of thinking and action might around a shared vision. This vision will form the guiding orientation for a coalition of partners from the above four worlds, as well as others. We will particularly seek to outreach to the mainstream beyond our familiar circles.
Starting in the summer of 2012, the above group of those involved in the core initiating group have already started the conversations which are leading to clarity on objectives,guiding principles, audiences and desired outcomes.
Outputs of the Lab will includes an initial think-piece or series of think-pieces to help inform a wider debate with other groups and movements. We expect to run workshops and webinars where shared learnings, insights and common ground can be explored. The objective will be to seek to find common visions of a possible future economics and principles to guide it and which a very diverse set of stakeholders could support and promote.
Other outputs could include a live and evolving online wiki resource on these issues and a possible book which might seek to popularise some of the outputs in the same vein as Professor Chang’s best-seller 23 Things They Don’t Tell You About Capitalism.