Sustainability Spotlight: Community-Driven Economics
As depicted in the picture above, we can indeed be supported by nature and the community in our daily lives. In regards to the support our economy provides, there are a number of alternative schools of economic thought that are worth exploring as we deal with the ramifications and externalities of a neoclassical approach to the social science. For example, community-driven economics provides a foundation for an equitable and sustainable world. Based on the idea that economic relations should benefit the community as a whole and not simply individuals, community-driven economics focuses on relationships of affirmation rather than exploitation; finding beneficial links across disciplines and social interactions rather than searching for resources to use and narrowly pursuing growth. Communal forms of economics create a community-based approach to decision-making, encouraging a socially just allocation of resources and an adherence to ecosystem scale (Daly et al., 1989; Davis, 2006; Ekins, 1992; Lucey & Laney, 2009). For example, the creation of substitutes for natural capital is scrutinized and faith in technology is limited for solutions to current problems surrounding population growth, declining fossil fuel sources, pollution, and climate change (Orr, 1992; Schumacher, 1989). Instead, the relationships between people are the focus of pursuing critical change and a better economy in the future. This is termed as social capital and is the focus of alternative economics applying integrity as the true measure of success for the economy. Social capital refers to the social trust, norms, and networks people can draw upon to solve common problems (Sirianni & Friedland, 1997).
Historical Context
Challenges to the dominant economic paradigm have been building strength in the past decades. The boom and bust of our free-market approach to economic activity is running into a looming wall of false assumptions. Authors critiquing the current economic perspective explicate the undemocratic nature of the social science depicting the lack of oversight for the steadfastly believed assumptions in economics (Smith, 2010; Throsby, 2001). One of the first challenges to a constricted view of business and economic purpose came from American economist, Howard Bowen, in his 1953 book The Social Responsibilities of the Businessman:
"The moral imperative all of us share in this world is that of getting the best return we can on whatever assets we are privileged to employ. What American business leaders too often forget is that this means all the assets employed -- not just the financial assets but also the brains employed, the labor employed, the materials employed, and the land, air, and water employed." (Bowen, 1953, p. 259)
This commentary is in opposition to Milton Friedman’s admonition that social responsibility adversely affected a corporation, or any business for that matter (Friedman, 1970). Bowen points out what goes unnoticed in many economic assessments – environmental impacts, societal concerns, resource degradation – matter equally to the financial bottom line. The goal is to show that social responsibility substantiates the value behind a company and supports its successes rather than presenting hindrances to operations. Priorities of economic business development remain only because the dominant corporations wield extensive influence promoting Friedman’s viewpoint rather than Bowen’s. This persuasion carries over to our educational efforts in the social science.
Currently, economic education is bound to faith in the promise of transferring individualistic motivations to social well-being. The goal of community-driven economics is to change the appeal of participating in the economy to one of community integrity rather than a higher standard of living and individual desires. The process of resocializing economic relations broadens the view of economics ultimately making people feel more involved and responsible for their actions (Gibson-Graham, 2006; Schor, 2010). The connections between people cannot be assumed, rather they should be revealed. Transparency is a key component to this approach to the social science, as behind-the-scenes interactions such as large business transactions and political opinions become performers on the center stage.
Therefore, an outcome of more holistic evaluation correlates to a resurgence in public input in economic decisions. Community-driven economics encourages discursive debate not present in the current structure (Eisler, 2007; Gibson-Graham, 2006). Change is driven through discussion. If the intellectuals and academics can spend time analyzing the inner workings of economics, why can’t the commoner? It is a very restrictive position to be in when the message passed along revolves around a firm belief that the market will be the best outcome, so better not to worry about things. This removes disciplines and viewpoints such as politics and ethics that influence the overall economy. All people in society contain the capacity to provide an informed opinion. A goal of community-driven economics is to inspire this collective ability into action and create a space where the economy is an approachable topic for all. Indeed, the setting for advocating these structural shifts is fostered by unfortunate events regarding the health of the economy.
Events, such as the financial crisis of 2008, have spurred extensive writings around the root causes for the occurrence. The vanishing commons and growth of an economic divide pinpointed the past decades with a business domination over economic thought (Kraft & Kamieniecki, 2007; Piven, 2006; Rowe, 2005). With this overwhelming position, it was difficult to see this oncoming recession. Remaining steadfast in the economic provocations ignored that change in the social science, or any science for that matter, is the norm (Perez, 2002).
The neoclassical approach to economics is focused on turning limits into barriers that can be overcome or transcended (Harvey, 2010). This false reliance on human innovation and substitutes to create methods around barriers is pushing us to the brink of resource availability and living capacity. What is overly bothersome is that the captains of industry intentionally set out to shift the consciousness of society away from sufficiency to over-indulgence (Ewen, 1976; Leonard, 2010). The result was a fervor that is akin to a religious commitment in faith for this constant pursuit of growth (Nelson, 1991). Products are actually designed to be obsolete in a matter of years. Planned obsolescence is the intentional degradation of consumer products and perceived obsolescence is the fabricated devaluation of materials (Leonard, 2010). These examples of economic practices represent the trends alternative economics are aiming to correct. The ideas for change inspire and furnish solutions to the overcoming the challenges to a paradigmatic shift.
Changing of the Guard
Critiques of the neo-classical and institutional versions of economics are becoming more prevalent (Fernández, 2008). Bringing awareness to the table that economics is indeed a discipline requiring consistent revaluation and adaptation harkens back to Rachel Carson’s conviction of our collective experience having meaning:
We live in a scientific age; yet we assume that knowledge is the prerogative of only a small number of human beings, isolated and priestlike in their laboratories. This is not true. The materials of science are the materials of life itself. Science is part of the reality of living; it is the what, the how, and the why in everything in our experience. It is impossible to understand man without understanding his environment and the forces that have molded him physically and mentally. (Carson, 1952)
A desired shift finds its origins in many great minds, rather than a few. Investigating the interconnections and how different experiences collaborate to form societal values is a step in the direction of promoting community-driven economics. Before simply accounted for as market fluctuations, flaws are being revealed in the economic foundation to unravel where inequities and market failures are coming from. Both biologists and economists are even questioning the idea that we are all selfish beings (Benkler, 2011). From a different point of view, avenues for change exist.
The alternative science provides a reframing for progress in the economic sectors. Capitalism can actually be seen as an aberration because it negates the baseline consumption that once sustained the human population for millions of years. By focusing on the term development, rather than growth, there is a possibility to improve quality of life with a given output without necessarily increasing the amount of material goods we need. In combination, the focus on development encourages true efficiency of resources, which is a basic fundamental component of economics. The allocation and structuring of economics becomes not about ownership but access (Sharpe, 2011). Overall, these new focuses are meant to shift the association of economics from money to people.
A common misconception that follows commentary on the social science of economics is that money must be the main focus. The pecuniary dominance aligned with economic thought produces a phenomenon caused by the marketization of goods and services. Before markets and corporations, economic transactions were socially driven. Through redistribution, reciprocity, and/or self-sufficiency human societies prospered without the presence of markets (Polanyi, 1957). People relied on communities for survival. Each person in the community played a role and contributed to sustenance for all. Whether in the form of harvesting, sharing skills, or transporting resources all citizens interacted in a reciprocal nature. Not only did this framework ensure basic survival, it also inspired happiness (Galbraith, 1987). The continuing success of the “ancient” economies was based on social capital, not the physical and financial capital necessary to support markets. This view into the past shows that economics is not wedded only to finances.
Furthermore, forms of government also used to be closely associated with economic actions. Politics and economics were once considered one entity, not separate disciplines. The two realms existed as one with cooperative roles and mutual support for goals (Polanyi, 1957). Politics supported the economy rather than sought to take control or remain absent from involvement. The current divisive political parties make politics an unattractive complement to economics, hence the persistence of the partition (Hogeland, 2011). It’s hard to promote a transition to incorporation of elected spokespeople and decision-makers, when trust and motive are constantly in question. This has a trickle-down effect to suggesting community drivers for decisions, because market proprietors would be circumspect of intentions and vulnerability to groupthink and manipulation, now associated with politics. Faith in the market is without this risk because it does not require such regulations (Hayek, 1944). With this prevalent belief, it is important to show why giving responsibility to communities is the best option for the economy and why it will mitigate the challenges of distribution. The good in people must be shown for market-driven faithful to buy into a community-driven process of decision-making.
Part of the mission for alternative economics involves reinstating ethics along with politics. Researchers in the field point out that our daily “decisions are inherently social and that the economy is at the center of our ethical praxis” (Gibson-Graham, 2006, p. 88). There is opportunity to utilize our natural social attraction to forming discussions. In other words, the common space we share is a place for questioning and shared discourse in regards to creating a healthy and thriving economy (Ostrom, 1990). Ethics innately pervades when economics is about people and not money. Adapting and getting back to the roots of the social science increases the breadth of thinking that goes into reforming economics.
Finally, we as economic agents are realizing that there is a more holistic perspective on what creates worth and value in the economy. Termed as non-use values, something as simple as the mere presence of a natural area can provide an economic boon that goes unnoticed in current measurements (Alward, Arnold, Niccolucci, & Winter, 2003; Beatley, 2004). Thinking outside the pecuniary box provides an enlightened perspective of what makes up a productive economy. Which is why the focus of community-driven economics resides with social interactions rather than market permutations.
Social Capital
The roots for the capacity to get beyond the overwhelming focus on money lie within fostering social capital (social trust, norms, and networks people can draw upon to solve common problems). This concept of social capital actually received its first mention in an article centered on education. Lyda Hanifan, a rural educator noted by the prominent political scientist Robert Putnam, put forward that social capital “are those tangible substances that count for most in the daily lives of people” (Hanifan, 1916). This first attempt at defining the term hits home the message that this from of capital is the most valuable as “it counts for most”. I agree with the significance, but would argue aspects of social capital are also intangible. For example, happiness is an intangible substance. Social capital may manifest itself in different tangible forms, but its roots are not in the physical world. Dewey took the concepts of social capital to greater heights when he applied the concept to the broader spectrum of education outside the rural landscape. Dewey suggests education integrate experience and a positive classroom atmosphere to support the use of social capital (Dewey, 1916). The spread of the term through education and further use has refined the terminology to focus on the social interactions and relationship as the origins for social capital. Expanding coherence of social capital’s significance is one of the many aims of the thesis project.
Social capital is significant to the community-driven economics perspective because it exemplifies how prosperity depends on more than what can be produced by the market. The social networks, culture, and relationships cannot be manufactured. There is no assembly line for piecing together the fabric of human-to-human interactions. A strong network of people is the foundation for a functioning economy. The origins for the worthwhile interaction of these interrelationships are derived from our education. Whether it is at home, in the outdoors, downtown, or in the classroom, we gain experience. This experience ultimately contributes to action. Strongly established social capital allows societies to manage their goods and avoid the tragedy of commons described by Garret Hardin (1968). Community-driven economics fosters this growth in capital. Using elementary education as a platform, this growth can start early and we can manage to promote equitable and sustainable use of all those goods we share in the world.
Businesses, in charge of many of the exchanges of goods and services around the world, are taking a natural step that brings companies close to the community and the environment (Nattrass &Altomare, 1999). A social motivation to gain a respectable reputation matters to businesses in order for them to stay afloat in a culture that values sustainability and long-term thinking. Businesses are accounting for their own social capital in making decisions to pursue their own bottom lines.
The impetus of building social capital comes from a perspective outside of the market that includes households, communities, and nature. Each of these entities exists independently of the market, but all equally support the economy. This connection implies there should be more attention given to elements outside market control to truly create a thriving economy. The social nature of capital was significant prior to the commoditization of labor where work time and one’s job became a product of supply and demand, an abstraction from life (Daly et al., 1989). A way to recapture the connectedness of communities to capital is to consider the goods that we share not only in our small communities, but also on the global stage.
Global Perspective
An important concept to be aware of in this framework is the existence of global public goods (e.g. clean air, knowledge, water). These goods are non-rivalry and non-exclusive. There is no cost to consume the good or pass along a piece of information. There is also no way to exclude people from the benefits or the impacts of the good. As a result of these characteristics, there is no market approach to management. With widespread extent and long-run implications, global public goods require a conscious awareness.
Because the dominant paradigm exists, solutions have been stagnant. Because communication and transportation costs are declining and technological change is on the rise, these goods are even more effervescent. Compromising these goods is not an option, especially with the stresses oncoming with population growth. Peace, equity, environmental sustainability, and financial stability are all attainable if these goods can be properly managed (Eisler, 2007; Sachs, 2005; Sen, 2009; Stern, 2007; Stiglitz, Sen, & Fitoussi, 2009). The top-down approach and focus on developing markets is not the answer. Community-driven economics can provide the basis for bringing people into the position to be the impetus for change in a righteous manner.
Collective Happiness and Morality
The final aspects of community-driven economics that deserve mention are happiness and morality. Both play a role in our everyday decisions, yet people in a western society are also influenced by the market and an individualistic goal to be better than others (Smith, 2010). The basic inclinations to our moral minds develop through many experiences that exist outside this sphere (Lehrer, 2010). Where can more happiness exist than in a community built on relationality and cohesion pursuing a common vision of prosperity? Instead, society spends its time striving for material goods and more money. These items are linked to happiness and survival in an intense manner. There is little chance of turning back and returning to divine modesty in living, but there is hope in drawing on the ability of people to come together.
The goal of traditional economics is to increase utility, a form of happiness that is measured in graphs. A true feeling of happiness comes from the existence of good; there are no degrees (McMahon, 2005). When happiness becomes manipulated by markets and based on different levels it is severely marginalized. Rather than being in a state of happiness, or a state of looking forward to being happy again, we find ourselves in stages of so-so, content, kind-of happy, really happy, ecstatic, etc. Of course, we should embrace feelings of happiness that are extraordinary, but there should be a base established through the well-being of all in the community. This admission begs the question, what determines what’s good?
Connecting with Ladson-Billings culturally relevant pedagogy, the mindset that determines what is good comes from a collective amalgamation of perspectives. With an awareness of the dominant paradigm’s faults and resisting a single perception of the concepts, society would be apt to listen to each other to come to agreements of what characteristics of happiness we share. In Ancient Futures (2009), Helena Norberg-Hodge points to the value in cultural lifestyles that are independent of the rat race and exist as a function of interconnected relationships. In this framework, the right decision is not made for one, it is made for all.
Even the famous John Stuart Mill who promoted the economic philosophy of free markets early in his life came to realize the shortcomings of marketization. He added chapters to his famous treatise The Principles of Political Economy (1848) to reflect a socialist perspective on more direct roles for the government and ideas for a cooperative wage system where wages would be distributed fairly. A man who took on advocacy of women’s rights and accounted for the value of the environment in his writings, Mill is a fine example of the value behind challenging the norms. Mill was also the first proponent of steady-state economics stating that the stationary state would have benefits in contrast to never-ending economic growth. His forward thinking is evident as he challenged the schools of economic thought and the constant progress driven models:
If the earth must lose that great portion of its pleasantness which it owes to things that the unlimited increase of wealth and population would extirpate from it, for the mere purpose of enabling it to support a larger, but not a better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compel them to it. (Mill, 1848)
The focus is on defining prosperity in the quality of life rather than the size of the population or amount of money that exists. We lose happiness and we lose a chance for a better world. How can we hope to produce equity as the stresses on our resources compound? Mill’s statement shows that the economy must be framed in the limits of the world we live in. Because if growth is overzealously pursued, we lose the very prize we seek to attain. Yes, there may be a small percentage of the world’s population living in the lap of luxury, but what about the rest of society. Even when benefits of living standards are being extracted from exploitation of the natural world, they are redistributed in crude elitist fashion. If the driver were community and not markets, would this be the current reality? The perceptions can be changed through the avenue of education.
Summary
Our economic theory tells us that the heart of our lives, our soul, our substance – and I use those terms advisedly – is caught up in goods and services… so now most people are in some measure what the marketplace tells them to be. (Nelson, 1984)
The dominating economic perspective is summed up here as we adhere to the market in a strangely zombie-like state where our heart seems to follow the beat of a distant drum. This piece outlined the origins of this state of mind and presented its correlation to the challenges arising in economics and the changing guard of influence. This transition in economic thought encourages a hope for a shift in the economic paradigm. Following this history, it is important to focus on how change is being promoted. In fact history shows that,
… conscious systems hunt and find their stable new levels much more quickly than unconscious systems. The question is, what aspects of our social system support an evolutionary surge to a new level, rather than falling short or falling apart? (Ray & Anderson, 2001, p. 253).
So why not be conscious in our actions and our critiques of the dominating social science of economics?