Common Welfare Economy
Description
"The „common welfare economy” provides an economic systemic alternative to the free market as well as to the centrally planned economy, a completely different way and partly also a synthesis from both major historical concepts.
The author and political activist, Christian Felber, created the basis for the common welfare economy in his previous book “New Values for our Economy – an Alternative to Capitalism and Communism.” (2008). A circle of entrepreneurs together with Christian Felber consequently refined this model and endowed it with a name.
The common welfare economy tends to be a form of market economy, in which the polarity of motives and goals of private corporate aspirations are reversed: from profit-orientation and competition to the pursuit of the common good and cooperation.
Contemporary research results show that, despite deeply rooted prejudices, this alternative can be well-combined with human nature. Even more, the common welfare economy builds on exactly those values that contribute to fulfilling interpersonal relationships: confidence building, responsibility, compassion, reciprocal support and cooperation.
These human and sustainable behavioral patterns can be measured with the help of the Common Welfare Balance Sheet and rewarded with an amplitude of incentives and systemic step-ups: the strive for economic gain will be ethically invalidated.
Today, financial profit is regarded as the pivotal criteria for entrepreneurial success. In the common welfare economy, on the contrary, it is not the money that counts, but the common welfare balance. In that case all human beings and living entities feel well." (http://www.gemeinwohl-oekonomie.org/en/)
Characteristics
"The model of the common welfare economy – 15 cornerstones
1. Collectively Shared Values 2. Reversing Incentive Frameworks 3. Economic Constitutional Convention 4. Common Welfare Balance 5. Rewarding Common Welfare 6. Utilization of Financial Surplus 7. Liberation from Force of Continual Growth 8. Limitation of Income and Wealth 9. Democratization and Public Ownership of Large-scale Enterprises 10. Democratic Commons 11. Democratic Bank 12. Advancement of Democracy 13. Democratic Conventions 14. Five New Obligatory Subjects in School 15. Social Leadership Skills
1. The same collectively shared values that contribute to fulfilling interpersonal relationships are the basis for the Common Welfare Economy: confidence building, cooperation, appreciation, democracy, solidarity. (Scientific research proves that fulfilling interpersonal relationships constitute a key factor to happiness and motivation.)
2. A shift from competition and profit-orientation to cooperation and the pursuit of the common good will take place, established through a new regulatory incentive framework. Entrepreneurial success will be redefined from financial profit to the positive effect on common welfare.
3. A broad participatory bottom-up process predefines the parameters of common welfare; these are later handed over to a democratically elected economic constitutional convention and then anchored in the constitution via referendum.
4. A new main balance sheet serves to measure common welfare: the Common Welfare Balance . The more a company adheres to the social, ecological, democratic and solidarity principles, the better is its balance sheet result and the higher its Common Welfare Score: the maximum attainable are 1000 Common Welfare Points
5. The better the common welfare result, the more legal advantages are granted to a certain company: lower taxes, less customs duties, loans on more favourable terms, priority in public procurement and research programs, etc. These benefits allow the socially responsible, democratic and cooperative businesses to more easily cover their (increased) expenses.
6. Die The financial balance thus becomes a secondary balance alongside the primary Common Welfare Balance. Capital is no longer an end, but a means . It merely serves to achieving the goal of the company or, to be more precise, the goal of all entrepreneurship: to further and increase the common good. A financial surplus may be used for: investments (with social and/or ecological value), loan repayment, accrued liabilities (to a limited extent), profit distribution to employees (up to 20 times the minimum wage) and for interest-free loans to other companies. It may not be used for profit distribution to non-employees, hostile acquisition of another company, investments in financial markets (those will not exist anymore).
7. As profit is no longer an end in itself, companies may now aspire to their optimal size. They are not in danger of being bought out and they are not forced to outgrow or outperform other companies. Businesses will be freed from the prevailing force of continual growth and pressure of dog-eat-dog competition.
8. Inequalities in income and wealth are limited: the maximum salary is capped at 20 times the minimum wage, individual wealth at 10 million Euros. Capital transfer and inheritance can be permitted tax free up to 500,000 Euros and in the case of family-owned enterprises up to 10 million Euros. Any exceeding amount is distributed to the next generation as a democratic endowment: Equally, seed capital is indispensable to ensure equal opportunities.
9. Large-scale enterprises with more than 250 employees partially pass over into a shared ownership by its employees’ as well as the public. Enterprises with more than 5,000 employees pass over entirely. Elected delegates of ‘regional economic assemblies’ will represent the public. The government does not exercise authority over public enterprises.
10. The same applies to democratic commons , the third category of property, next to a majority of (small) privately owned businesses and a minority of large-scale enterprises owned (partly) by employees and public. ‘Democratic commons’ are enterprises which provide basic services in the sectors of education, health, social welfare, mobility, energy, communication, and banking: services of general interest.
11. The „democratic bank is a major democratic common. Like every enterprise it serves the common welfare and, as a democratic common, the democratic sovereign – not the government – exercise control over the bank. Its core services include guaranteed savings, loans on favourable terms, eco-social high risk loans and free demand deposits accounts. Financial markets as we know them today will not exist anymore. The development and use of complementary currencies will be supported as far as useful and possible.
12. Direct democracy and participatory democracy will augment representative democracy. The democratic sovereign (the people) will be able to regulate its representatives, initiate and pass laws and control important economic domains, such as banks.
13. Alongside the democratic economic/common welfare convention, a number of other assemblies are summoned to further develop democracy: education convention, media convention, convention for services of general interest.
14. To anchor the values of the Common Welfare Economy deeply in the next generations (as the social Darwinist and capitalist ideals are engrained in the current generation), a few new obligatory subjects in school education are introduced: values and ethics, ‚emotionology‘, communication, democracy, nature and wilderness/environmental education .
15. As the parameters of entrepreneurial success have a new definition in the Common Welfare Economy, different leadership skills will be required. Those persons that are socially responsible and competent, empathic and compassionate, socially and ecologically oriented will be the highest in demand and serve as the new role models for business leaders." (http://www.gemeinwohl-oekonomie.org/en/inhalte/)
Critique
Andreas Exner, citing German-language material:
"I wrote a detailed critique of Felbers "Gemeinwohlökonomie" http://www.streifzuege.org/2011/neue-werte-im-sonderangebot-die-gemeinwohlokonomie-christian-felbers
Here is a short version: http://www.social-innovation.org/?p=1821
Here I made suggestions for amendments: http://www.social-innovation.org/?p=1843
Basically, "Gemeinwohlökonomie" is a sort of Corporate Social Responsibility, enlarged by enhanced labelling efforts and the image of a "new economic model".
On a theoretical level, it adopts a market-socialist view, but without the state capacities necessary for such an approach to be viable (within its own framework)" (via email, 03/2011)