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A strong and vibrant social economy is a neccessary foundation of a healthy human society. For this reason, the regeneration of social economies is fundamental to any successful effort to address the world's proliferating social crises. Taking appropriate steps requires understanding the nature of social economies and why they have become so dangerously eroded.

Undervaluing the Social Economy

The fact that a market economy depends on a strong social economy to maintain the ethical structure, social stability, and personal security on which the smooth function of a market depends is routinely overlooked by economic policy makers. To the contrary, the destruction of the social economy to advance economic growth is not only accepted, but applauded by most economic planners - much as they applaud economic activities that advance economic growth by depleting natural capital.

Why isn't the important output of the social economy recognised in economic statistics? One explanation is that this output is harder to count. Another is that women have traditionally had the primary role in the productive and reproductive activities of the social economy, while men have had the dominant role in the monetised market economy. When male economists decided to develop a measure of economic output, they assigned more importance to things produced in the pursuit of money, traditionally the world of men, than to what was produced as an act of love, mutual obligation, or service to family and community, traditionally the world of women. As any economist will cheerfully point out, economics is about money - not love.

It is hardly surprising that predominantly male economic policy makers using indicators that recognised only the male dominated market economy were inclined to believe that moving women into the money economy constituted a real contribution to improved national health and wellbeing. Many women, eager to escape the inferior status assigned to their roles in the social economy and to have a wider range of opportunity for economic participation, readily embraced the logic of the male dominated market place.

Where Markets are Inefficient

As productive and reproductive functions have been transferred from the social economy to the market economy, more and more of the return from productive activity has been shifted away from the actual producers to those who perform overhead functions that add no real intrinsic value. When family and community members work directly with and for one another there are no taxes, management salaries, lawyers fees, stockholder dividends, middlemen, brokers, transportation costs and other overhead expenses. The full value of the goods and services produced is shared and exchanged within the family and the community among those who actually created the value. The result is an extraordinarily efficient use of resources to meet real needs.

Indeed, in many sectors, the market economy's overhead costs are so high that, even with two wage earners and longer work hours, many households cannot adequately meet needs once met quite satisfactorily by the social economy. With no parent in the home, children are sequentially cared for, if at all, by nurseries, daycare centres and schools. Parents, or more often a single impoverished female parent, are left with little time, energy or encouragement to do more than function as income earners and night guardians. The modern urban home has become little more than a place to sleep and watch television - if the household can afford one. High rates of deprivation, depression, divorce, teenage pregnancy, violence, alcoholism and drug abuse, crime and suicide are among the more evident consequences in both high and low income countries.

In general, public policy proposals intended to correct these indicators of serious social dysfunction take no account of the fact that they are a direct consequence of the destruction of the social economy, which is in turn a consequence of the same unsound economic policies commonly favoured by efforts to increase employment.

Restoring Roots, Balance and the Social Economy

The market is an important and useful human institution for meeting cetain needs to which it is well suited. Unfortunately, we have lost sight of a basic reality: that market economies best serve the human interest when they function as an adjunct to a robust social economy founded on values of cooperation, sharing, trust and mutual obligation. Market economies are most likely to serve such a purpose when:

  • They are primarily local in character - augmented by, rather than dependent on, trading relationships with more remote localities;
  • Capital is rooted in local ownership and most production is carried out by small enterprises;
  • Strong democratically accountable governments set the goals and provide a regulatory framework for the socially productive function;
  • A strong and politically active civil society holds government accountable to the public interest.

When any of these conditions are not met, the market is likely to undermine the social economy and reduce human security. A globalised market tends to negate all of these conditions. The result is enormous social inefficiency - as the world is now experiencing.

We must find more holistic approaches to dealing with poverty, unemployment and social disintegration based on restoring the bonds of community and healing the planet. This requires a search for economic policies that strengthen rather than displace the social economy. In addition, such policies must accomplish what contemporary social economies have failed to do - support gender equity and a sharing by women and men of responsibility for the functions of both the social and market economies.

Evoking Images of Sustainable Societies

It is time to move beyond competing globally for a finite pool of formal jobs and think more creatively about ways of engaging people in sustainable livelihoods - meaningful productive activities meeting real and otherwise unmet needs of households and communities in ways that are socially and environmentally sustainable. This shift in perspective recognises that the economic systems of healthy sustainable societies must do a great deal more than provide a favoured few with jobs to earn money to buy things they don't need to stimulate the economy to provide a favoured few with jobs to earn money to buy... etc.

In a more holistic vision, sustainable societies:

  • Provide all people an opportunity to contribute meaningfully to meeting the needs of family, community and society;
  • Give first priority to meeting the basic needs of all and provide them security against involuntary deprivation;
  • Live within their means and discourage consumption patterns beyond an equitable per capita share of sustainable ecosystem output;
  • Structure production processes so that environmental resources are used in sustainable ways; and,
  • Contribute to maintaining a strong and dynamic fabric of cooperative human relationships.

Our modern concept of a "job" is imbedded in a complex set of values, institutions and relationships that are leading us into ever deeper social and environmental crisis. The concept of a "sustainable livelihood" is similarly embedded in a complex, but quite different, set of values, institutions and relationships suited to a sustainable postmodern society. While there are groups all around the world working to create the future within their local settings and who are seeking out appropriate guidelines for policy and constructing possible scenarios for a sustainable future, these remain speculative and fragmented. We are of necessity engaged in an act of creation, not replication.

For most of us, the topic of jobs brings to mind primarily images of people working in the plants and facilities of the world's largest transnational companies for which localities around the world are competing. The term "sustainable livelihoods" is meant to evoke very different images of people and communities engaged in meeting individual and collective needs through the cooperative use of local resources in environmentally sustainable ways.

As the unfolding image takes on ever greater definition, we may begin to discern an organisational structure that links the local with the global in a multilevel system of human habitats organised as continually self-renewing, self-governing, self-reliant eco-communities. Household eco-communities might be clustered into neighbourhood eco-communities, which may be clustered into village eco-communities, in turn clustered into regional eco-communities, and so forth to the level of a global eco-community. A system goal would be to concentrate decision-making authority at local rather than global levels, with the result that those who make decisions would be more likely to bear their primary consequences and it would be more difficult for one group to pass the environmental or social costs of its decisions onto another group.

Since the few examples we have in our modern world of societies that practise sustainable living are found among remote peoples and cultures, often living under primitive conditions, there are those who dismiss any talk of sustainability as calling for a return to living in trees and caves and hunting wild animals. It is an uninformed charge that bears no relationship to the vision of those who point to the need for economic justice and a balanced relationship between people and environment as necessary conditions for the survival and continued progress of our species.

The challenge is to make full, but selective, use of our technological and organisational capabilities in taking a new evolutionary step toward the creation of human societies that define their wellbeing not by the size of their garbage dumps, but rather by their success in assuring the physical security of all their members and in achieving ever higher levels of intellectual, social, cultural and spiritual development.

Source: David C. Korten, PCDForum.

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