Imagine a world where company success was determined by all the good it does. And where polluters of water, air and soil could not get investment. The Mint talks to Christian Felber about an economy for the common good.
Christian Felber is the founder of an organisation that seeks to overhaul the current dominant economic system. He emphasises that he has never studied economics formally. He lists as the downsides of modern capitalism “unemployment, inequality, poverty, exclusion, hunger, environmental degradation and climate change”. His worldview is, however, not eligible for fringe or eccentric status.
His organisation, Economy for the Common Good (ECG), is part – arguably on the radical edge – of a growing body of thought that questions the ethics and validity of current economics thinking. ECG declares it is proposing a “more ethical economic model, in which the wellbeing of people and the environment become the ultimate goal of business.” To this end Felber has created the common good balance sheet to replace conventional financial performance reports.
“Money or capital is a means but it’s not the goal, that’s absolutely decisive.”
More than 500 companies have completed a common good balance sheet and, Felber claims, more than 1,900 firms – in 40 countries but mostly based in Austria (Felber’s home country), Germany and Switzerland have supported its principle. Felber says ECG had had talks with a number of listed companies about joining its common good scheme. And a bank for the common good is at an advanced stage of development.
What then is the governing principle behind ECG and Felber’s outlook?
“According to virtually all philosophies from Aristotle, including Adam Smith and as well all philosophical schools all over the world, money or capital is a means but it’s not the goal, that’s absolutely decisive,” he says. He continues: “If money turned into the goal and becomes the end of our economic activities, then we have a complete different understanding and practise of the economy. If common good is the goal, the highest value, then the value system that supports the common good is human dignity, justice, solidarity, sustainability, democracy, respect and the like. “
He maintains that these values are recognised through various disciplines including “contemporary psychology and social psychology, but also game theory and educational sciences,” as essential in enabling human relationships to flourish and to meet “the basic needs of human beings”.
If money turns an end in itself, the value system that replaces the common good value system is striving for success, is competition, is efficiency, is unlimited growth, is inequality and the like. This is exactly what we have been hearing from economists although they don’t have any moral legitimacy to impose a different value system on society, but they succeeded in doing so.”
That success, is, Felber says, remarkable because it runs counter to basic human needs: “It’s an extraordinary accomplishment to manage to impose on the world a value system, which is opposed to constitutions, which is opposed to philosophies of all types and all cultures and, which is opposed to the conviction of people’s hearts,” he says.
He does however have “a very speculative interpretation” of what underlies the near global adoption of the tenets of modern capitalism.
He says he sees “day to day” intelligent, academic or city economists who become drawn to the profit motive because of a betrayal of their most fundamental needs: “It is that people or persons who are not well connected to themselves and do not really know who they are or what their basic human needs are, they more easily get contained by… in psychology we call them, extrinsic values, like money, success and power, which according to psychological science are not able to satisfy your basic needs,” Felber explains.
He goes on: “Maybe that is a dynamic that happened in academia and more and more people followed these values and this kind of thinking.” He includes in this driver behind growth-motivated economies “powerful elites who mix up their personal happiness with exercising power and being rich.” He describes this as “a deep betrayal” of themselves because “in psychological studies many of those rich people are not happy in depth.
“In psychological studies many of those rich people are not happy in depth.”
“They are motivated by their fears, and that’s why they keep fighting for the continuance of the system. It’s a combination of powerful elites and intellectuals that are big brains but weakly connected to their actual basic human needs.”
Felber declares that all his adult life he has been drawn to try to understand the world as an entirety and was thwarted in doing so in his university years. “I always tried to understand the whole, that’s why I wanted to study universal sciences, which is not offered at the universities that I know; because they forgot what the name university means.
“The institution of the university promises by its name to offer access to wholeness. That’s what I was interested in – not only cognitively or intellectually but also holistically. I also mean not to separate thinking from feeling, from intuition, from moving or from handicraft. I really mean holistically – that was my interest.”
He says there was no guide in his early life to this line of thinking: “Nothing from the parents, no teachers at all, it comes from experience. I call it a grace to have very early – I was not even 10 years old – experiences of, I would call them, ethical feelings.”
But his sense of being “connected with everything, part of one wholeness,” came to him while fishing as a child. “This experience was so strong that it clearly started to guide my life and it’s the reason why I didn’t not want to study one discipline, economics or philosophy only or whatever, and why I was always clear about engaging politically and where my engagement, my involvement is needed most. That’s why I started to engage with global financial markets, with globalisation, with international trade regimes.
In the end he read Roman languages at university “because I wanted to get to know different cultures and I had the intuition that life is different in Latin America. I combined it with psychology, sociology and political sciences.” He describes how, on leaving university he first encountered the sort of personal flaws he describes in the leaders of the conventional economies; but in very different circles.
“I had a first attempt to engage in organisations like Greenpeace and Solidarity with Latin America and other initiatives. Then I saw that many of those who engage in these movements don’t know themselves well and will project their personal problems to the wider world. They tried to fix the unjust monetary order instead of healing their conflict with themselves and their neighbours. Maybe they could not accept some parts of their own personality.
“We should not act on the pain or from rejection and conflict.”
“Instead of working on that, they focused on not accepting and rejecting cultural systems like the monetary system or the trade system or the undemocratic state of our political system.” He says the people in those groups were acting as they did to displace dealing with their own issues. “That’s why they don’t act out from love, from an accepting and loving and caring attitude, but from out of pain and conflict.”
When he concludes that activists like Greenpeace and the leaders of global businesses are following a false god in the form of extrinsic values, why does he think they are drawn to that? He puts it down chiefly to the fact that money can be quantified: “It might help in the run of centuries to mix up means with goals,” he says.
Underlying motivation is, he says, central to his outlook: “I think although it’s painful what is happening in the world we should not act on the pain or from rejection and conflict. I come back to my original experience, my conviction is that we should act from acceptance, from tenderness, caring and love.”
Felber recounts that the path to his current position was laid during a decade from age 15 locked in study, “reading literature from all disciplines, all kinds of books and sources, also all spiritual traditions.” And between 18 and 28 he “focused on psychology and did a series of therapies.” And he renounced his membership of the Catholic church “to be open to all spiritual traditions but also all philosophies and ethical schools.
From an interest in ecology relating particularly to the destruction of rain forests in Brazil. Felber says his interest in economics emerged from his involvement in debates with economists. “That’s why I was drawn into trying to understand how economists think and argue and their basic assumptions and values and ethics, their specific ethics, now I would say their misled ethics and that’s why I was drawn into economics.”
While he continues to read texts that challenge conventional neoclassical economics, Felber says he is “trying to respect more and more the original sources, which spread the spirit that is still dominating economic thinking.”
His own trajectory to being an in-demand public speaker and creating a bank for the common good began he says with writing a book, 50 Proposals For a Better World. “Everybody agreed with the proposals, but then economists and also ordinary people asked if they were not against liberty or efficiency or growth or success. I realised that the value arguments are stronger than the technical arguments.
“That’s why I focused on the underlying values of our economic system and academic economics and noticed more and more the contradiction between those values that underlie current economics thinking. I got more and more intrigued and interested in these ethical contradictions.”
Ultimately he arrived at his conclusion that the goals of conventional economics were “opposed to the value system of the rest of society and also of what we know from all other disciplines that deal with humans” and the means have become the goals.
In striving to reverse this reversal as he sees it, Felber says the most important contribution of the economy for the common good will be to demonstrate the common good should be the overarching goal for the economy and that it aligns with existing national constitutions, most philosophies and “at least micro-economics if not macroeconomics,” according to some texts.
“That’s why we developed a common good test which stands above return on investment or even instead of return on investment.” In addition, he says the common good balance sheet goes before the financial balance sheet and the common good product replaces gross domestic product.
“These conditions are always in conflict with social movements, with political parties, with people’s minds and with the common sense,” says Felber. “Economists were never convincing with their value systems – they did not succeed in winning people’s hearts.” He cites findings from various sources to demonstrate the human inclination to reject the current economic model: “According to an international survey, 72% of people globally say business is failing to take care of the planet and society as a whole. And a poll by the German Bertelsmann Foundation in 2010 and 2012 revealed that 80–90% of Germans and Austrians desire a “new economic order.” He claims also that 67% of Germans would like Gross National Happiness to replace Gross Domestic Product (GDP) as the measure of the nation’s success—a measure that would place “comprehensive welfare” as the highest goal of economic and social policy.
“Wherever you meet people in any country in the world, who know themselves well, they reject intuitively capitalism,” Felber declares. But he stresses that most of those people are not versed in economics and they are not powerful in business, politics or law so their arguments are not compelling. That, Felber says, creates in them a sense of powerlessness so they stay away from “these odd and very weird social culture sub systems of economists, media and politicians,” and do not influence the debate. “That’s why the elites that remain have a comparatively easy game to corrupt the political system, and to keep imposing on the majority something, which does not enjoy the support of the majority,” he says. This maintained ruling class power base is, Felber says, the reason why pluralistic economics and other alternative schools are emerging.
“Our genes do not force us to compete against other human beings. This is scientifically proven.”
How then does Felber see those who hold dominion ever being drawn into accepting his changes? He says an important starting point is in “academic discourse.” ECG has, he says, started to build a common good economic policy that, he says, reveals “the flaws of neoclassical economics.” Secondly he advocates building practical alternative prototypes and distributing them. He anticipates that the 500 companies that have completed a Common Good Balance Sheet will swell to thousands and provide the established economists with tangible evidence of the validity his common good approach.
“To change the law, somebody powerful has to make the changes – this is the third strategic layer. We’re trying to involve the companies in a campaign for laws that enhance an ethical economy instead of a capitalist economy,” he says.
His fourth strategic move, he says, brings him squarely up against the ruling elites: “ I have experienced many times now over the past few years that the best ideas, the best alternatives, despite being supported by large majorities – sometimes 90% of the population – those ideas weren’t implemented by governments,” he says. To address this established challenge Felber is looking to make changes at national constitution level: “We are developing a deeper and more effective form of democracy, which we call sovereign democracy.
“The word sovereign comes from Latin and means to stand above all. If the people are above all then it would be clear that the people can write a constitution to define the duties of the parliament, the government and so on.
“The constitution would anchor the ten to 20 fundamental cornerstones of how the economy should work. Then parliaments would have to implement the constitution that came from the people. Felber accepts this to be an “ambitious” plan but he sees it, in the long term as “a very natural and organic evolution of our current democracies.”
Felber’s aspirations will remind many of us who were in, or approaching adulthood in the early 1960s, of the swell of expectation that societies could free themselves from established pre-war mores and rules.
“The goals of conventional economics were opposed to the values system of the rest of society.”
His fifth “strategic layer” resonates with those days’ even stronger ambition to shift the collective consciousness of societies to understand what it is to be human. “There is broad and interdisciplinary evidence that humans are not greedy or egoistic by nature,” Felber says.
“Our genes do not force us to compete against other human beings. This is scientifically proven. We are made for complex collaboration not for competition. Competition is less effective than collaboration and our brains are made for complex collaboration.”
Felber is optimistic naturally but he sees grist to his mill even in the election of Donald Trump and Brexit: “[They] just prove that people are not satisfied with the current state but they don’t have more appropriate channels or means to express what they really want. We’re trying to work on that; to give people more precisely what they want instead of globalised capitalism, instead of liberalised financial markets, instead of unlimited inequality or instead of education for individualistic, egoism and greed.
“One day the outcomes will not be Brexit or Trump but a more democratic and a more ethical society. Although it’s a dominion and my actual arguments will be that there is no example in history for a dominion that is not based on natural authorit. “ There is no getting away from it; Felber talks the language of the fringe – the radical idealist. But while his ideas are unswervingly cool, they are holding their own in the hot house of business.
And his observations are shared by a growing number of people including economics Nobel laureate, Joseph Stiglitz. He argues that gross domestic product is an inadequate measure of society’s success because it doesn’t account for benefits and harm that growth brings to society.
Stiglitz too shines a light on inequalities. In a recent TED lecture he pointed out that, in the US, the richest 1% has taken up more than 100% of the gains made in GDP over the past two years. In the face of that and other similarly unjustifiable developments in the economies of the West, Felber’s ambitions for limits on property ownership and income; an end to dividends and financial speculation; and cheaper loans and taxes for ethical firms start to sound utterly sensible.
