Economy comes from creating value
04.02.2020 - The economy should serve people. Unfortunately, the reality is often the opposite, especially from a global perspective: resources, the climate and therefore we too suffer from thoughtless consumption and exclusively profit-orientated economic models. Steinbeis is trying to play its part in solving this dilemma through a sustainable production cycle and compliance with the strictest environmental protection criteria. The scientist, economics lecturer and author Christian Felber also wants to make a difference - with his ideas on an all-encompassing understanding of the economy. He revealed some of his approaches to us in an interview.
Christian Felber is not actually an economist. Nevertheless - or perhaps precisely because of this - he calls for a revolution in economics in his new book "This is not Economy". The graduate philologist, political scientist and former science journalist was a founding member and spokesperson for the anti-globalisation network Attac in his native Austria. Today he is an author, activist, lecturer and currently a fellow at the Potsdam Institute for Transformative Sustainability Research. Felber teaches at both economics and humanities universities, where he endeavours to take an all-encompassing view of our economic systems. Since publishing the book "The Economy for the Common Good" in 2010, he has been the face of the movement of the same name, whose core concern is the following: the ideas of infinite economic growth and free markets are detrimental to the well-being of people and the environment - so sustainable alternatives must be developed. Factors such as ethical values, human rights and resource protection should be incorporated into the implementation and assessment of the success of economic processes. Felber and the Economy for the Common Good argue, among other things, that companies with a positive energy balance should enjoy economic advantages over environmental offenders. Felber believes that as long as products that are harmful to the environment and therefore to the common good are cheaper than those that strive for sustainable production, our consumer behaviour will hardly change or change too slowly. We spoke to him about his theories.
Mr Felber, your big problem with today's economics and financial market theories is that they see themselves as part of the natural sciences and not the social sciences. Can you explain this in more detail? What does this misclassification lead to?
Today's dominant neoclassical economics, which followed classical economics around 1870 (most famous representative: Adam Smith), wanted to exclude all ethical and political questions and concentrate only on the measurable. The most measurable things, however, are purely financial figures that say nothing about happiness, values, meaning, the environment or democracy; these values, which are ultimately important in life, remain underexposed or ignored. This has led to a tunnel-like focus on returns, profit and GDP - an "economy that kills" because it does not take life into account. Symptoms of this radical aberration are the violation of human rights and human dignity, the emergence of systemically relevant banks that are bailed out with taxpayers' money and extreme inequality or competitive advantages through the legal externalisation of health, environmental and climate costs.
Why do you think the term "free market economy" is misleading?
It is often misunderstood that free markets are free from state regulation, which is a misleading image because the basic building blocks of the market - private property, companies, contracts, money or education - are state infrastructures and services. The "intervention" of the state in the market makes just as much sense linguistically as the "intervention" of the house owner in the kitchen. The market is part of the democratic community just as the kitchen is part of the house. It must be planned, organised and managed according to certain rules. What forms of corporate law there are, whether banks are profit- or public welfare-orientated, whether they are allowed to become systemically relevant, whether climate protectors have a competitive advantage or climate sinners and whether companies have to draw up a public welfare balance sheet or just a financial balance sheet - all of these are democratic decisions made by the state. The question of the areas in which there should be no markets must also be decided democratically. This is largely clear in the case of human trafficking, organ and child trafficking or forced and slave labour. The central bank, rail network and prisons are already controversial, and it is completely unclear in the areas of elderly care, childcare, health and education. Citizens could and should decide in democratic processes where there should be public goods and services instead of markets.
What are the most important indicators for a positive public goods balance sheet?
The common good balance sheet initially comprises 20 building blocks. These address a fundamental ethical issue, e.g. the meaningfulness of products and services, their ecological and climate impact or humane working conditions. Specific aspects are then examined in greater depth, e.g. health and safety at work, fulfilment of purpose, time management or co-determination. Finally, indicators measure specific aspects, e.g. accidents at work, sick leave or dismissal rates.
The essential components of quality of life come into play in the economic product of the common good: health, satisfaction, quality of relationships, social cohesion, democratic participation, fair distribution, ecological stability or peace. Interesting indicators here are, for example, the proportion of women in management positions, quality of sleep, foreign military deployments or drinkable rivers.
But aren't the economic factor and the common good factor often mutually exclusive in reality?
That depends entirely on how "economic efficiency" is defined. If I commit a crime because it benefits me economically, it is obvious that "economic efficiency" understood in this way and the common good are mutually exclusive. And as long as the destruction of the rainforests, the heating up of the global climate, the use of tax havens, the disruption of social cohesion or the creation of extreme inequality fall within the legal definition of economic freedom, the same exclusion applies. Only when economic freedom is defined in such a way that people and the environment must not be harmed can economic efficiency and the common good be reconciled. A balance sheet for the common good ensures this. Economy comes from value creation. Only when values are created without destroying other values can we seriously speak of a "free" economy - or of an economy for the common good.
Cover picture: José Luis Roca
Author: Nadine Kaminski
