‘The first task for the new economy we need is to meet all basic needs within the planet’s boundaries,’ write Dirk Holemans of Oikos and Koen Wynants of Commons Lab. “It requires an economy that, instead of producing more and more and boosting consumption, wants it Beware† Read all other contributions from our summer series here The thinkers from Knack.be: Where are we going with our money?
It is an insight we can no longer ignore: the economy cannot continue to grow on a limited planet. This illusion of infinite growth has brought us into the current unstable, dangerous situation: we have disrupted the natural processes that ensured a stable living climate, with moderate temperatures, clean water, etc. We now see that the carrying capacity of the earth has been exceeded every day with more and more heat waves, forest fires, hurricanes and floods worldwide.
But Prosperity without growth, as the British thinker Tim Jackson described it more than ten years ago in his bestseller, it is still difficult for many economists and opinion makers to imagine because it contradicts dominant thinking. But growing from (also described as deviated) is just what we need for a vibrant future. It is a positive vision for the future, which strives to drastically reduce the flow of energy and materials, while at the same time giving everyone on earth the prospect of a good life. Perhaps the greatest source of resistance to this future is that it goes head-on against self-interest and power relations.
ONE grow outeconomics requires a form of economic institution that aims to meet the needs of people rather than today’s companies with their focus on short-term profits and the interests of shareholders. It requires a thorough rethinking of how we organize society.
A first review is the reassessment of public services, such as public transport, in order to arrive at a sustainable mobility system. But citizens who organize themselves in so-called general, can also play a crucial role in the development of a future-oriented economy. Common is a group of citizens who together carefully manage or produce a good. A way of organizing that is centuries old and is now popping up everywhere. Think of citizens who jointly manage a piece of land, realize a cooperative housing project together or form an energy cooperative, because they themselves want to produce green electricity, and always find care for each other and the planet crucial.
A strong example is energy cooperatives such as Ecopower. For the most part, they produce electricity directly for their partners with their own wind turbines, so they are a bit dependent on the whims of the energy market. And even better: They specifically inform and encourage their business partners to use as little power as possible. The situation is a little different for traditional energy companies, who want to sell as much electricity as possible to satisfy their shareholders on the stock exchange.
For example, the average consumption of an Ecopower family is significantly lower than that of an average Belgian family (average 2000 kWh, the Flemish average is 3500). These co-operatives also invest part of the profits in the local community. Instead of the dominant extractive economy – which removes the added value produced from a place or community – there is one generative economy, which generates various forms of added value for the community.
A crucial contribution from the general public is that they take part of the economy out of the market. This is seen, for example, in agriculture with initiatives such as The countrymen, which removes agricultural land from the speculative market and then makes it available to organic farmers. The latter invests a lot of time and energy year after year in improving the soil quality. It is therefore crucial that the well-maintained soil does not return to the hands of the agro-industry. Or consider the example of cooperative housing associations, which take buildings out of the insane housing market and guarantee their cooperatives housing security for the rest of their lives at an affordable price.
The good news from this series of examples is that it shows that we already have the new type of business we need to build an economy that fits back within the boundaries of the planet. And as citizens increasingly shape themselves, the question politicians inevitably ask is – is there support? – responded immediately positively. Common partners that are usually established in the form of ethical cooperatives – including internal democratic decision-making and a ceiling on profit sharing – can form the basis for restructuring entire economic sectors. Governments can support this turnaround by providing tax subsidies to companies in the generative economy. It would also be a logical choice, because these companies add societal value in different ways.
Of course, all this also requires a cultural change, not least in economic thinking and how this affects society. For decades, dominant economic thinking has been dominated by neoliberal dogmas, such as the dissertation by Milton Friedman, who wrote in the 1970s that corporate social responsibility consists only in creating more profit. Meanwhile, with ecosystems on the brink of collapse, extreme heat waves and screaming inequality, we know better. The new economy we need has as its first task to meet all basic needs within the planet’s boundaries. It requires an economy that, instead of increasing production and burning consumption, wants it Beware† It means restoring the living environment and ensuring that we maintain our economy sustainable is about to stay. So the good news is that citizens are already fully installing the new type of business for these sustainable times. It can be the foundation of a truly sustainable economy.
Dirk Holemans is the coordinator of the Oikos think tank.
Koen Wynants is the coordinator of the Commons Lab.