The supporters of the Economy for the Common Good advocate for an economic system that is oriented towards sustainability and solidarity instead of growth.
The Economy for the Common Good
(ECG for short) is a counter-model to the current market economy, which is characterised by capitalism. However, the primary aim of the ECG is not to abolish private entrepreneurship, but to place a
stronger focus on values such as sustainability and solidarity.
Thus, the ECG is not about maximizing profit but rather about serving the common good.
The basic guideline of the ECG comes -among others- from Christian Felber -an Austrian author and globalisation critic.
But what makes the Economy for the Common Good so different?
The wage gap - what is fair?
Managers receive up to times higher wages than the lowest earners in the same company.
In the ECG, the gap between the top earners of a company and the lowest earners of a company should not become too big. Therefore, in the ECG, the wages of the top earners are at most times as high.
Basic ideas
We are currently in a tough price war, meaning that different companies that offer the same products, try to produce and sell them for less in order to get a higher market share. In order to do this the companies are still developing new strategies that can save money: whether it is relocating to countries with lower wages or using short-lived and environmentally harmful materials - supporters of the ECG see this as a wrong direction and demand that we rethink.
In a study by scientists from the universities of Flensburg and Kiel (Germany), an improvment in sustainability was achieved through the ECG point based system. They also found that sufficiency plays a major role in the ECG.
The orientation of the system
The focus on profit maximisation (at any price) has fatal consequences for workers and nature.
How well a country is doing is usually measured by the growth of the GDP, the Gross Domestic Product.
The fact that the wellbeing of people and the environment are not measured in such assessments is criticised from various sides, as the GDP of a country can be relatively high, but the wealth among the people of a country is not divided in a fair way. Hence there may be a few very rich people and many people who live in poverty.
Nevertheless, the growth of the supply of goods and services in an economy is the decisive indicator for governments today - just as profit growth is for companies.
What is different in the Economy for the Common Good? Instead of the GDP, the indicators of success in the ECG are very different. They are measured with the help of the Common Good Balance Sheet and the Common Good Matrix.
Human dignity, solidarity, ecological sustainability and social justice and democratic co-determination.
In the point based evaluation these core values are assessed in relation to -not only the owners and financial partners involved in the company- but also suppliers, employees, customers and the social environment.
The Common Good Balance Sheet is a value-oriented mode of evaluation. That means the evaluation process promotes further development of a company, community or educational institution.
Sources:
This article was translated from German.
GDP Definition: https://dictionary.cambridge.org/dictionary/english/gdp
The ECG: https://www.ecogood.org/what-is-ecg/ and https://www.ecogood.org/apply-ecg/common-good-matrix/
Sources in German:
https://utopia.de/siegel/gemeinwohl-oekonomie-bilanzierendes-unternehmen/
Sufficiency: https://www.bund.net/ressourcen-technik/suffizienz/suffizienz-was-ist-das/
Image 1 by Clker-Free-Vector-Images (Pixabay), Image 2 by DarkmoonArt_de (Pixabay), Image 3 by OpenClipart-Vectors (Pixabay)
