Does the
common good arise from selfishness?
“It
is not from the benevolence of the butcher, the brewer, or the baker that we
expect our dinner, but from their regard to their own interest” (Adam Smith, first
scientific economist, 250 years ago).
Adam Smith expected that an
“invisible hand” would lead the individual selfishness to the welfare of the
greatest number of people possible.
This is the basis of the
capitalistic system. Also called free market economy, it is a system that tries
to maximize the profits and competition.
It encourages egoism, greed and
envy.
Those traits are opposed to the values normally acceptable in our daily
personal relations, like trust, sincerity and mutual appreciation.
This contradiction divides us deeply as individuals and as a society.
Should we be cooperative and help the others? Or should we only care for
ourselves and don’t give a damn about the others?
If we pursue our own welfare as a supreme good, then it will be common
practice for some to use the others as means for our own ends.
Does a “free”
market exist?
It will be free if any economic agent could withdraw unharmed from any
economic transaction. But many cannot do so, because they are to a great extent
dependent on others. An employer can withdraw from a labour contract more
easily than an employee, a lender in a loan contract, more easily than the
borrower, etc.
Three
common myths about capitalism
1.
There is no alternative to the market economy
2.
Any other system will lead us to poverty or, even
worse, communism.
3.
Market economy is the most productive system as
history shows; competition is inherent to the nature of the human being.
No economist has demonstrated there is no alternative, ever. Actually
cooperation is a better solution than competition. True motivation is intrinsic
rather than extrinsic, like it is competition. Best results are achieved when
people are enthusiastic about an idea, and they are full of energy.
In competition, because goods are scarce, there are lots of losers. If
you set your own personal value in being better than the others, you depend on
the others being in a worse position, this is sickening!
The ten
crisis of capitalism
1.
Concentration and abuse of power
2.
Disruption of competition and creation of cartels
3.
Manoeuvres to attract capital
4.
Prices often reflect power relations
5.
Inequality and fear
6.
Famines
7.
Destruction of the environment
8.
Consumerism
9.
Deterioration of values
10.
Suppression of democracy
Proposal:
Economy for the Common Good
1.
Polarity reversal in the incentive framework
The new objective of companies is to produce the maximum contribution to
the common good, not to make the maximum profit.
2.
Redefine economic success
Today economic success is measured as GDP in the case of a country and
financial profit in the case of companies. Both are monetary indicators.
Does GDP indicate if, in a country:
- are they at war or
in peace?
- is there a
dictatorship or a democracy?
- is income is fairly
distributed?
Does financial profit indicate if a company:
- creates of destroys
employment?
- job quality
increases or diminishes?
- profits are fairly
allocated?
- takes care of the
environment?
Financial profit offers information of how a company serves itself, not
how it serves the society.
There may be a nexus between profit and common good but it is not
necessarily so. A financial profit may exist together with job destruction,
sexual discrimination and destruction of the environment.
The ECG will measure success by the social dividend, a non monetary
indicator.
3.
The balance sheet of the common good
Will measure what is laid out in the majority of constitutions:
- human dignity
- solidarity
- justice
- environmental
sustainability, and
- democracy
The balance of the common good measures how the stakeholders (suppliers,
customers, lenders, borrowers, employees, society) live these basic values.
In the intersections you find the indicators of common good
- the usefulness of
goods and services
- labour conditions
- if production is
ecological
- how clients are
treated
- solidarity with
other businesses
- sharing of profits
- remuneration of
women
- if decisions are
taken democratically
The result will be the assignment of “points”
4.
Reward the search of the common good
The more points on the common good a company gets the more legal
advantages it should enjoy. Like:
- VAT reduction up to
100%
- Lower tariffs
- Bank credits in
favourable conditions
- Priority in public
biddings
- Cooperation with
public universities
- Outright aid
5. Permitted uses of the surpluses
- Investments
- Provision for
losses
- Capital increase
- Distribution to
stakeholders
- Loans to
stakeholders
Capital yields should only benefit those who made them possible with
their work. Only persons working in the company should participate in profits
in an equitable manner.
6.
Optimum size
Growth in nature is only a means to reach the optimum size. So should it
be in the world of enterprises.
7.
Structural cooperation
The ECG is a market economy
and is based on private companies and money. So competition is possible, but
the more companies cooperate among themselves, the better their balance sheet
of the common good will be and their survival possibilities. From the present
win-loose system, we’ll go to a win-win system.
8.
Cooperative management of markets
Economy of the common good is a market economy and markets fluctuate. If
demand in a sector drops or if there is a sudden surge of the supply, how will
it manage this?
In the actual win-lose system, prices will drop and companies will go
bankrupt. In the ECG, the affected companies will convoke a “crisis committee”
to seek solutions, like:
- reduce working
hours;
- reduce jobs and
retrain workers
- reduce business and
specialize in other fields
- close business and
find jobs for redundant workers
- merge businesses
- strive to find
other solutions
9. Sabbaticals
All workers will enjoy a sabbatical every 10 years during which they will
perceive the minimum salary.
10.
Solidarity income
2/3 of the minimum salary in case of emergency
