“INVESTING IN THE “COMMON GOOD” FOR LONG TERM PROSPERITY“

My firm used to be a firm full of “waste.” Fortunately my community, my land have a big river, extremely important for the local ecosystem. I started to throw all my industrial-toxic waste into the river. My firm had a great benefit from that decision…We saved a lot of money and continued to produce a lot of waste. I became very rich. After 10 years all the fishers had to abandon the community and tourism to the river decreased and local economy started to go down. We had to buy water from neighboring communities, and life in our community started to become very, very hard. After 15 years I had to close my firm. When we talk about “The Economy of the Common Good” and about “Long Term Economy” take this example in your mind. By polluting the river, the firm has not worked for the “Common Good” and has had a very short-term view. The final result was ecological, social and economic crises. If we do not work for the Common Good and in a Long Term Economy perspective, our community is bound to fail. So, what is the Economy of the Common Good? Who are the actors involved? What is an Ethical balance sheet? How can we join the movement? Christian Felber, founder of the Economy for the Common Good Movement, answered to these and other questions.

• Our analysis is that the current pre-dominant economic model is mixing up goals and means: Money (or capital) that should only be a means, have become the goal.

• The common good balance sheet measures the contribution of a company to the common good, in values such as dignity, solidarity, sustainability, justice or democracy.

• A first Master “Applied Economy for the Common Good” has started in Austria. In Valencia (Spain) a first Chair Economy for the Common Good was established last year. Now, this chair helps to train ECG consultants and auditors.

• The ethical balance sheet is a score card which matches fundamental values – dignity, solidarity, justice, sustainability, democracy – with all stakeholders of a company and evaluates and measures on the base of topics, aspects, and indicators, to which degree a company lives these values concretely.

• The movement consists of local chapters – engaged individuals can found one in every city, municipality or region. So far, more than 100 chapters have been founded in 25 countries.

• All institutions and actors of the current system can be part of the change – if they are ready to transform or be transformed by the citizens. The media ought to become a ‘public good.’.
  

“Our analysis is that the current pre-dominant economic model is mixing up goals and means:

Money (or capital) that should only be a means, have become the goal.”

Question 1 | The Economy for the Common Good: the meaning

“We offer participatory tools and processes

to manyfold actors of the present society.”

Question 2 | The actprs involved

So… Moving from short-term financial profit to wellbeing of people and the environment. How can such a process be facilitated and who are the actors involved? What are the advantages for companies?

We offer participatory tools and processes to manyfold actors of the present society. Citizens can build local chapters in their towns and counties. As consumers, they can use the label on products of common good companies; as investors, they can use the common good exam or become cooperative of the common good cooperative.
Companies can do the common good balance sheet, and they will be rewarded by stakeholders and policy-makers if they achieve a high score. Municipalities and cities do their own common good balance sheet and invite private firms to do so. They incentivize them in the public procurement and with direct subsidies.

Finally, we collaborate with universities and schools. They do research on the ECG and teach its contents. A first Master “Applied Economy for the Common Good” has started in Austria. In Valencia (Spain) a first Chair Economy for the Common Good was established last year. Now, this chair helps to train ECG consultants and auditors. The regional government of Valencia is creating a public register of all companies with an audited balance sheet in order to support them with legal incentives in the future.

Question 3 | The companies involved

Most of them are small, minor or micro companies, quite representative for the overall structure of businesses. They come from all branches and legal forms: from agriculture to banking, from tourism to manufacturing and PR. We are in touch with seven corporations that are listed at the Frankfurt stock market index, but none of them has decided to do a balance sheet. Among the pioneers, there are three banks, two cooperatives and one savings bank. The major cooperative, with 800 employees, has eliminated the whole bonus system because they made the experience that it did not match with their values. There is an organic bakery with 30 employees that invites the supplying farmers to set the corn price. There is a furniture manufacturer which ask its clients if they really, really need what they are asking for. If not, they discourage from buying the piece or encourage to buy something else or somewhere else or later… And there are some companies that invite the employees to participate in the property, beginning from a small part to the majority in some cases. The “cooperative for the common good” which is a fin-tech start-up founded by the movement, is financing sustainable projects on base of a common good exam.

Question 4 | The ethical balance sheet

It is a score-card which matches fundamental values – dignity, solidarity, justice, sustainability, democracy – with all stakeholders of a company and evaluates and measures on the base of topics, aspects, and indicators, to which degree a company lives these values concretely. Each of the 50 aspects can be achieved in four steps, and there are negative steps. Every company can achieve a maximum score of 1000 common good points. So, it is not a “balance sheet” in the traditional sense, but is the function to make transparent the overall ethical achievement of a company. If it uses child labour, destroys the environment, corrupts governments or evades taxes in tax havens, its balance sheet score might turn negative, with the risk of running into financial insolvency. In extreme cases, even “ethical insolvency” is possible.

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Question 5 | The movement…

The movement consists of local chapters – engaged individuals can found one in every city, municipality or region. So far, more than 100 chapters have been founded in 25 countries. There is a manual how to found a new chapter on the movement’s website. Another option is to join one of our expert hubs. These are structured internationally and focus on specific tasks such as the development of the common good balance sheet, consultancy for companies, audit, collaboration with municipalities, teaching, or IT. Delegates of all local chapters and expert hubs meet once a year in our international delegates assembly where, at the moment, all strategic decisions are taken. For more direct democracy, we are developing an “online sovereign” – these will be the most relevant decisions of the movement which will be made by all active members, via Internet. Next to this movement dimension of the ECG, there is also a network of associations and other legal entities to provide the necessary formal infrastructure for the volunteers. So far, nine national associations have established the international federation. Besides, there are specific vehicles such as a first foundation, a financial services cooperative and a limited company for the realisation of other professional activities: We practice a Common Good Economy in our own area of influence.

“All institutions and actors of the current system can be part of the change –

if they are ready to transform or be transformed by the citizens.

The media ought to become a public good”

Question 6 | The role of all actors in the Economy of the Common Good

All institutions and actors of the current system can be part of the change – if they are ready to transform or be transformed by the citizens. The media ought to become a “public good”: to a large degree independent from advertising and business, set up by professional journalists, and radically disentangled (not more than three legal entities per owner). Big corporations have to shrink to a top size of e. g. 10 billion US dollars turnover and do a common good balance sheet. Only if this is excellent, they might become bigger. A fusion control has to be established at the global level, as part of the WTO or, better, UN system. Banks could be obliged to convert into not-for-profit businesses as they are a fundamental infrastructure for the economy and the society as a whole. As soon as they start to strive for profit, the lose track of their societal purpose. History shows that cooperative banks and savings banks have worked best of all types of banks. Such fundamental decisions are unlikely to be met by governments and parliaments as currently the financial and economic power is already too concentrated to allow for smooth democratic processes. That is why the ECG movement also advocates the improvement of the democratic system involving the citizens in a higher degree than today. “Sovereign democracy” is an answer to Colin Crouch’s “Post democracy”. It would give the citizens stronger democratic rights (“sovereign rights”) and the possibility to make decisions on fundamental questions of the economy of their own. One example: Asked, if they would limit income inequality, citizens in dozens of countries decided to cap top incomes with ten or 20 times the minimum income. Today, the highest publicly known income in the USA is 350.000 times the legal minimum wage. In more general terms, people are very likely to say no to both, socialism and capitalism, and choose an economy for the common good.