Compassionate New Economics
Author: Joseph Edozien -H.R.H. Prince Chibuike of Asaba-Chairman of the South African New Economics Network.
( Article Type: Sustainable Development )
‘Compassionate New Economics’ articulates ‘a sharing economy:’ sharing fairly and sharing kindly the socially produced commons wealth of society. The idea of ‘The Commons’ is central in compassionate new economics.
The Commons is not a place. It is the abundance of free living resources which a good society provides to its people as a birthright, if only because they are truly the ones who produce the wealth through the cooperation in their organised activity.
A truly good society is a humane society: a sharing, caring and nurturing one.
The current state of human affairs, with its large-scale unsharing, uncaring and inhumanity, is no longer necessary, even if it ever was. Human productive capacities, technologies, and accumulated knowledge and skills have developed to a sufficient degree that we can reliably produce enough for all to live well, even if not all opulently. And living well importantly includes how one feels about oneself and others. It is very much about the quality of social connectedness. Relations between people are affected by the interoperation of resources and activity. People now mostly relate to each other through and around resources and productive activities, including such things as money and jobs. Thus, how the provision of resources and social activity is organised profoundly affects how people feel about themselves and about each other. It affects how they relate to each other and to themselves.
But this system connecting people, resources, and organised productive activity is precisely the economic system. Therefore, one cannot separate economics from relationships between people, even the most intimate and personal of relationships.
Economic systems shape spiritual, ethical and emotional relationships between people. Economics is a spiritual science dealing deeply in human values, human ends, and human emotions. This may surprise people who think of economics as a cold, abstract and unintelligibly difficult subject. What is most important in economics is how the organisation of resources and productive activity affects how people feel about themselves and about each other, and thus how they treat themselves and treat each other. How people organise themselves in relation to resources and production affects all areas of society and culture, especially mental health, for good or for ill.
One cannot ever separate the ethical from the economic. One can only pretend to do so.
The view that ‘economics is ethics’ in extension is genuinely orthodox in the long tradition of theoretical economic thought. It is consistent with Aristotle, who formally founded the subject in the formal Western intellectual tradition. It is consistent with St Thomas Aquinas, who shaped economic thinking in Europe for almost 1 000 years. It is consistent with Adam Smith, who is considered the founder of modern Western economics. It is consistent with early modern European economists. And it is consistent with Karl Marx. More importantly, it is consistent with the economic thought of traditional indigenous peoples. Even more importantly, it is rooted in African cultural thinking.
It is the contemporary dominant Western paradigm of ‘dispassionate’ economics, with its separation of economics from ethics, that is actually quite heterodox in the long tradition of human economic thinking. In this sense, and in light of the long tradition of great economic thinkers, compassionate new economic thinking is actually more orthodox than today’s ‘orthodoxy.’ An economic system should be equitable to be sustainable in the long run. This means it should be sharing, caring and kind. If it is true that evil is unsustainable and good prevails in the long run, even if evil may be more effective in some senses in the short run, an economic system will have to be fair and share the social bounty well in order to be sustainable. It has to work well for most of the people, even if not all of them, otherwise it will eventually collapse or be overthrown. Societies, especially technological ones, are quite capable of producing material abundance. This is obvious. So, why is there this current thirst in the middle of the current wellspring? The answer lies in the political nature of the system of distribution. It is not that the goods are not there. It is that they are not distributed well. The political nature of wealth distribution is both the primary cause of poverty and the source of its solution. Therefore, it is necessary to democratise and demystify economic knowledge in order to promote social and personal well-being on a foundation of economic justice.
There must be at least three legs to the over-arching stool of a compassionate new economy: a debt free and non-interest bearing, multi-currency, social service monetary framework, a universally unconditional subsistence guarantee which anchors comprehensive social security provision, and local economic empowerment in a decentralizing internetworking economy of community economies which are circularly embedded in natural systems on an ecoregional basis. A deep and sustainable approach, and the most effective, to a compassionate society would necessitate changing the system of money creation in order to make money provision more just and more public-spirited.
Currently, money is created as public debt for private profit at interest. Our current dominant monetary system is what was traditionally called usury.
This is wrong because it introduces anti-social motives right at the root of money creation. Monetary transformation is central and fundamental to creating a just society. Money should become a genuine public utility. It should be created as a public service by public agencies democratically accountable to the whole society and granted into the economy debt-free and without interest for social service purposes. In other words, money should flow from public service into private enterprise and not the other way around. In such a monetary system, taxes would be unnecessary since money creation would itself finance social services in the public interest and so public goods would be self-financed. In such a system, ‘banking’ would not be a private business enterprise but a public social service.
Conversely, today, money is created as a for-profit private business enterprise for commercial purposes which flows into public service through the systems of circumventable redistributive taxation and uncircumventable public debt. This is why commercial values overwhelm all other social values in modern societies and why modern governments are in the end beholden to big private finance and big private business: in other words, to private and socially unaccountable oligarchies . This is why there are no real democracies today, only plutocracies in the guise of democracies. Usury and deep democracy are structurally mutually incompatible systems: the one by its nature centralizes and concentrates accumulative private wealth generation; the other by its nature decentralizes and deconcentrates distributive social wealth generation.
An affluent modern technological society should provide a basic sustenance to all of its people simply as a right of their birth and in recognition of their intrinsic human dignity and as a practical social expression of their right to live. In other words, there should be, and there would be if money were genuinely a public utility created for and as a social service, a universally unconditional subsistence guarantee since the money would be granted to the public as the first stage in the creation of public purchasing power for primary effective demand. Since it is axiomatic that effective demand generates feasible supply, it is thereby axiomatic that people would eventually produce even if they were freely granted the initial means of purchase for basic goods. Local production for local use is necessary to empower communities to be reasonably self-sufficient in order to provide personal-scale systems over which people have an acceptable measure of control. Such a community-centric economy of economies becomes decentralizing as it devolves economic power automatically to small-scale units. This leads to healthier and happier societies with much less anomie and alienation. This will thus not be an economy which super-concentrates most of humanity in ultra-scale super-cities and other vast conurbations. It will distribute social populations more evenly over natural regions. The super-exploitive economies of super-cities are not sustainable even though super-urbanisation is a current macro-trend of humanity.
While a decentralizing economy of community economies is in some sense less efficient than a large-scale centralizing monolithic super-urban economy when significant social and ecological costs are unaccounted for, or ‘externalised,’ it is no less scalable when well internetworked and it yields better social outcomes and is more sustainable. Most production need not be large-scale in any case. And large scale centralized production can be focused on the most complex infrastructural goods which serve to internetwork the tapestry of local economics.
Embedded in compassionate new economics is the concept of an ‘intentional economy.’ Intentional economies realise the idea that economic systems are artifacts. Economic systems are human creations capable of conscious design. Therefore, economic systems largely work as they are intended to do.
What may appear to be malfunctions are often social outcomes of deliberate design, and can therefore be changed by changing the design through policy interventions and civil action, or simply by general cooperative agreement on the design of an intentional economy. Parallel financial systems in any evolutionary transitional period will be necessary in order to avoid the emergence of chaotic social revolutions and massive public disorders as the current system breaks down which it will eventually and inevitably for technical reasons due to exponential debt deflationary implosions. Intentional Economics may be used to throw light on the persistence and pervasiveness of poverty. Is the poverty of the masses the result of a system malfunction, something which we today call ‘market failure,’ which can be corrected within the causal framework by simply ‘fixing’ the current system? Or is it, on the contrary, a covertly intended social outcome because it weakens the political power and reduces the employment cost of labour? Are there really such things as ‘externalities,’ or is that notion simply a way of masking the fact that the current system is actually not profitable when all social and ecological costs are genuinely accounted for within the financial accounting framework of the current system? When all true costs are internalized, we will find that current economics is a loss-generator rather than a profit-generator. And it is already apparent to most that current economies do not deliver well-being.
Developing the ideas of Intentional Economics so as to better understand the true limitations of policy choices and the systemic constraints on fair wealth distribution in the current system would be a fitting way to begin to carry forward the ideas on economic justice contained in Compassionate New Economics.