At a time at which the persistent socio-economic crisis is increasingly perceived as a systemic, multiple crisis rather than a cyclical one and at which the traditional economic models are called into question, there is a need to develop new models that respond better to the demands of today’s world by promoting a way of fair and sustainable development. This has led to the resurgence of old and the emergence of new alternative streams of thought that contrast the traditional neoclassical paradigm. However, despite the flourishing critical debate over the current form of capitalism and its underlying economic assumptions, concrete alternative economic models are hard to find.
The Economy of the Common Good (ECG), born in Vienna in October of 2010 as a movement of social innovation, is an expression of such a new economic model that places people and the functioning of their relations at the heart of economic activity. Unlike most movements that advocate for a change in the economic system, the ECG does not only have a vague idea of what is going wrong in the current capitalist system but presents a detailed alternative system, that is open for debate. Moreover, besides being an interesting utopia, a still small but growing number of initiatives, individuals, firms, and (local) governments all over the world commit themselves to the ECG and adjust their economic behavior, so that the ECG has also very concrete impacts.
Both, the concrete nature of the propositions as well the happening change at the ground, make the ECG open for attack and lead to the ideas being highly contested. In contrast to most critical social movements that coexist with the orthodox mainstream, the ECG has caused a lot of criticism and resistance from economists and economic interest groups. Since today, the debate is conducted in a polemic and non-scientific way and neither the ECG nor its opponents put their position in a theoretical context, although implicitly drawing on existing ideas of economic philosophy. The debate reveals the often blurred clash of paradigms and normative principles about the governance of the economy within the capitalist society. This paper seeks to exemplify and evaluate this clash with the debate on the ECG and answer the question: How are the different positions of proponents and critics of the ECG-propositions on the governance of the economy informed and driven by economic paradigms?
Table of Contents
Introduction
Literature and Theory
Empirics
1. Values
2. Measuring economic success
3. Legal incentives for companies
4. Financial profits
5. Company ownership and cooperation
6. Global cooperation
7. Income and wealth inequalities
8. Working time
9. Protection of nature and ecosystems
10. Direct and participatory bottom-up democracy
Summary
Conclusion
Research Objectives and Key Topics
This paper examines how the positions of proponents and critics regarding the Economy for the Common Good (ECG) are informed and driven by specific economic paradigms. It seeks to evaluate the clash of paradigms within the discourse on the governance of the economy.
- Foundations and core propositions of the Economy for the Common Good (ECG).
- Comparative analysis of ECG concepts against neoclassical and liberal economic thought.
- Investigation of critical arguments from economists and economic interest groups.
- Mapping of ECG propositions to various economic schools of thought including institutional, gender, and postcolonial economics.
- Evaluation of the societal fight for and against current capitalist systems.
Excerpt from the Book
1. Values
The ECG is thought to be based on and to promote the same fundamental values for the economy that make human relationships successful: trust, cooperation, solidarity, and sharing. This position is strongly related to the economic sociology school around authors such as Karl Polanyi and Neil Fligstein. Economic sociology suggests that markets are inherently social phenomena embedded in social structures and thereby its functioning is subject to societal values and discussion (Polanyi, 2008 [1944]; Fligstein, 2001).
Schmidpeter criticizes that this value basis is only valid within small groups of people who know each other but does not work on the macro level (2012, p. 3-4). Steigenberger doubts the existence of a common good and underlines that each individual must be able to decide what is good for him or herself (2013, p. 12). Both claims that the economy can only work based on competition of individuals and thereby draw on the ideas of the methodological individualism and the homo oeconomicus, which are rooted in the thinking of the classic liberal economic school of thought based on Adam Smith and linked to authors such as Friedrich Hayek and Milton Friedman.
Summary of Chapters
Introduction: Outlines the socio-economic crisis and introduces the ECG as a proposed alternative model that is currently the subject of intense debate.
Literature and Theory: Provides an overview of the ECG’s theoretical foundations and discusses existing criticism and academic debates.
Empirics: Details 10 key propositions of the ECG and contrasts each with the economic paradigms used by its critics.
Summary: Reflects on how the ECG incorporates various heterodox economic theories compared to the conservative paradigms of its opposition.
Conclusion: Concludes that the ECG debate is essentially an ideological clash between differing economic paradigms regarding the current capitalist system.
Keywords
Economy for the Common Good, ECG, Neoclassical Economics, Capitalism, Economic Paradigms, Social Innovation, Common Good Balance Sheet, Governance, Institutional Economics, Degrowth, Solidarity, Democracy, Economic Criticism, Market Governance, Sustainability.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on the Economy for the Common Good (ECG) and explores how proponents and critics of the movement are driven by different underlying economic paradigms.
Which central themes are discussed in the context of the ECG?
Key themes include value-based economic systems, the replacement of GDP as a success metric, legal incentives for cooperation, ownership structures, and democratic participation.
What is the primary research question?
The research asks how the different positions of proponents and critics regarding the governance of the economy are informed and driven by economic paradigms.
What scientific methodology is utilized?
The study conducts a comparative analysis of publications from both sides of the debate, contextualizing their arguments within historical and contemporary economic schools of thought.
What topics are covered in the main body of the text?
The main body breaks down ten specific propositions—ranging from value orientation and working time to global cooperation—and evaluates the opposition's counter-arguments.
Which keywords best characterize this work?
The paper is best characterized by terms such as ECG, economic paradigms, capitalist critique, institutional economics, and systemic change.
How do critics typically categorize the ECG?
Critics frequently interpret the ECG's propositions as Marxist or communist ideologies, often warning of command economy risks and the dismantling of individual freedom.
Why is the debate on the ECG considered significant?
It represents a broader societal struggle between those advocating for alternative economic models and those seeking to preserve the existing neoclassical capitalist status quo.
- Quote paper
- Simon Valentin (Author), 2019, The Economy for the Common Good and Its Enemies. The Different Positions of Proponents and Critics of the ECG-Propositions, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/497774
