Living Economies

One of the important lessons of history is that those who own, rule. Even in titular democracies, the powers of ownership readily trump the power of the ballot and play an often decisive role in shaping cultural values. For these reasons, growing living economies that democratize economic relationships in the deepest sense is a leading edge of the work of birthing Earth Community. The following are design principles to guide this work.

Economic Democracy

Democracy is strongest when people own the homes in which they live and have a direct ownership stake in the assets on which their livelihood depends. When workers are owners, the conflict between workers and owners disappears. When income and ownership are equitably distributed, the market allocates efficiently and responds to the needs of the many rather than the wants of the few. Local owners who have a long-term stake in the enterprises they own are patient investors who stay the course rather than seek quick profits from short-term market swings.

Local Preference

Communities are most economically secure and most in control of their own economic priorities when most of their basic needs are met by local businesses that employ local labor and use local resources to meet the needs of local residents for employment, goods, and services. Such communities are most likely to manage their environmental resources responsibly and sustainably when they depend on the yield of those resources for their continued well-being. Business decisions are most likely to take into account the health of the community and its natural environment when those who make the decisions live in the community and share in any social and environmental burdens those decisions create.

Human Scale

Human-scale enterprises and markets foster face-to-face economic relationships of mutual trust and accountability, which are an essential foundation of strong communities. Markets are more efficient and responsive when served by several small local firms rather than one or a few very large firms with absentee owners.

Living Indicators

Communities that evaluate their economic performance against indicators of social and environmental health are likely to manage their resources in ways consistent with the long-term well-being of children, families, and communities.

Fair-share Taxation

It is just and proper that those who enjoy the greatest economic gains from public services and facilities pay the greatest share of the costs of providing and maintaining these public services.

Responsive Markets

The economy functions most efficiently and democratically when businesses respond to the self-defined needs of people rather than spending large sums on advertising to generate demand for unneeded products. Advertising aimed at creating artificial desires distorts the market, wastes resources, serves no public purpose, and is properly discouraged by treating advertising as an after-tax expense

Responsibility for Harms Caused

Markets allocate fairly and efficiently only when the full cost of each good and service is internalized in its price. Because unregulated markets lead to the extensive practice of shifting the costs of private decisions onto the public, public intervention through regulation and the assessment of compensatory fees is essential to assure that the market prices reflect the full costs - including social and environmental costs - of a good or service. Similarly, it is proper for those who make private decisions and reap the benefits there-from to bear liability for harms to others resulting from intention or neglect. Limiting the liability of the owners and managers of corporations violates this principle and invites reckless and irresponsible behavior.

Patient Capital

Public policy properly favors patient investment over speculative trading that distorts and destabilizes markets and creates perverse incentives for managers to focus on short-term results and engage in fraudulent accounting practices.

Generational Jubilee

In the spirit of the biblical jubilee, it is proper to restore a condition of equity at the end of each lifetime by equitably distributing the assets of large estates on the death of their owners.

Information and Technology Sharing

Inventors and artists have a right to fair compensation for their original contributions. There is, however, and overriding public interest in the free sharing of essential information and beneficial technology, and no individual or enterprise has the right to monopolize such information and technology or unduly restrict its use by others.

Economic Self-Determination It is the right and responsibility of the citizens of every nation to control their own economic resources and to determine their own economic and social priorities, terms of trade, and rules for foreign investors consistent with their need and values so long as they internalize the costs of their decisions and do not shift costs onto others.

Fair and Balanced Trade Trade relationships should be fair and balanced. Fairness means that the price of exports must reflect full production costs - including the cost of providing workers with living wages and benefits and practicing sound environmental stewardship. Balance means each nation's exports and imports must be maintained in balance so there is no buildup of long-term international debt.

These are all basic principles of sound market economies. Market fundamentalists will denounce them as violating market freedom, a code work for the freedom of those members of a society with the most money to do whatever they like without regard to the consequences for others. It is the difference between the democracy of the many championed by Jefferson and the democracy of the very rich championed by Hamilton. The economic principles of Empire create a powerful bias in favor of valuing and concentrating wealth. The economic principles of Earth Community have a bias in favor of life and an equitable distribution of wealth and ownership.

The work of the economic turning centers on developing local living economies that embody these characteristics while resisting the encroachment of global corporations on the rights and well-being of people and communities. The work includes promoting community investment and policy reforms that strengthen local ownership and create a persistent bias in favor of enterprises that are human-scale and owned by those whose livelihoods depend on them.

You may obtain a copy of The Great Turning: From Empire to Earth Community here at Third Place Books, a BALLE member.