An Economy Of, By, and For the People
By Rick Docksai
In Owning Our Future, business ethicist Marjorie Kelly envisions commerce that makes human well-being, not wealth, its goal.
Although economic stagflation may be everywhere we look, seeds of a new, healthy, ecologically sustainable economy that serves the many appear to be sprouting. Marjorie Kelly, director of ownership strategy at Cutting Edge Capital, calls this new mode the generative economy. It encompasses many different business models, but they have a common trait: private ownership for the common good.
Generative design creates stability by avoiding excess, Kelly explains. These schemes generate wealth for their owners, but not to the extreme degree of today’s institutions. They are set up expressly so that too much wealth does not end up concentrated in a select few hands. More importantly, these businesses operate under clearly stated ethical frameworks and societal missions. Their founders direct them to serve community needs, not to maximize profit.
“They know it’s possible to have plenty and recognize that enough is enough,” Kelly writes. “There are other things they value more highly, like being happy, living authentically, feeling alive. Living well in community. Leaving the world a better place.”
Examples are emerging everywhere. The “solidarity economy”—cooperatives and nonprofits—is catching on in Latin America and Canada. Quebec has formally recognized it as an economic sector and now regularly funds it.
- The United Kingdom’s building societies are member-owned banking organizations. Because the customers are the owners, the banks exist to serve their needs, not to enrich shareholders. They have far lower-than-average rates of foreclosures and loan defaults to show for it, since borrowers obtain loans under fair terms and can work out reasonable payment arrangements.
- A British supermarket company, John Lewis Partnership, states its mission as commitment to the happiness of its employees. Each employee has partial ownership in the company, and between 40% and 60% of every year’s after-tax profits go directly to the employees as bonuses and salary increases. And on one occasion, when one of its warehouses had to shut down, the management helped the displaced employees to write résumés and find new jobs elsewhere.
- Minnesota’s energy cooperative Minwind operates the first farmer-owned wind-power turbines in the United States. All shareholders live in Minnesota, and 85% of the investors come from rural communities. The company is a sharp departure from the traditional business model under which farmers build wind turbines on their land but lease away the rights to absentee developers; the farmers themselves get to claim the wealth.
Society today wrongly believes that wealth creation is a virtually limitless process, according to Kelly. She argues that growth always has limits, and every economy eventually reaches them. She sharply distinguishes the real economy versus the financial economy, which consists of claims on the actual money of the real economy.
The financial economy is now four times as big as the real economy, which means that the world’s financial system rests upon a multitude of claims to money that no one has the money to actually pay! Its outcome is already obvious: financial crashes, like the one that swept the world in 2008.
Kelly places hope in such generative design models as the building societies, John Lewis, and Minwind. With their commitments to their communities and to their rank-and-file employees, they are examples of the responsible and sustainable business practices that the global economy so critically needs.
“As we make the painful turn into a new era—characterized by climate change, water shortages, species extinction, vast unemployment, stagnant wages, staggering differentials in health, and bloated debt loads—the industrial-age model of ownership is beginning to make less sense,” she writes. “It’s time to move beyond growth, to recognize that the economy as we once knew it will never return. Nor should it.”
The twentieth century saw a worldwide clash of capitalism and communism, and communism’s collapse left commentators proclaiming that capitalism is the only game in town. Marjorie Kelly’s ground-level reporting proves that it is not: Forward-thinking entrepreneurs are renouncing the worst aspects of both ideologies and constructing new ways of owning property and creating profits that affirm the individual while also benefiting the collective. Readers who long for a more just economic order will find an abundance of provocative ideas in Owning Our Future.
About the Reviewer
Rick Docksai is associate editor for THE FUTURIST and World Future Review. Email firstname.lastname@example.org.
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