A Briefing on the New Economics Institute

Purpose

The purpose of the New Economics Institute is to develop, research, and lead in a US context, the implementation of systemic solutions to a series of systemic problems that now face humanity.  These include:

·      The sustainability, climate and dwindling resources crisis.

·      The equality crisis, here and around the world, in income, assets, access, and democracy.

·      The financial risk crisis, with a system that is neither efficient nor resilient.

·      The well-being crisis, in which rising income is not translating into rising happiness.

 

Many and various solutions to these crises are emerging, but the solutions are often not systemic, nor are the systemic problems widely understood as such, certainly not by policy-makers.  Nor are the solutions being pulled together into a compelling and coherent narrative.  The task of the New Economics Institute is to provide this narrative, as well as the missing intellectual support for major system change – to collect and link together the solutions that are emerging, and to research and develop solutions where they are not.

 

To achieve the political and economic will to implement major systematic change will require a cultural shift in public opinion.  The work ahead for the New Economics Institute is to  provide the feasible solutions and effective communications that the vanguard requires to make this shift possible.

The New Economics Institute (NEI) is not a new organization, but a transition of the E. F. Schumacher Society, building on its thirty year history by emerging in 2010 with an expanded board of directors and expanded mission to respond to the critical need for a US voice for a New Economics. NEI works closely with the New Economics Foundation (nef) of London to bring its expertise, techniques and experience to the solution of systemic problems.

 

Distinctive role

The idea of a new economics – that is, new ways of organizing and understanding the economy which puts people and planet first – is now in the zeitgeist.  Other organisations are emerging to play critical roles in its development.  NEI is set to play an essential intellectual role in the shift in the US, as nef has been doing in Europe.  What NEI brings together includes:

 

Economics expertise – in a context of humane sustainability.  We are an economics think-tank, not a political lobby group.  We can bring to the debate the economic expertise to link the world of activists with the world of mainstream business.  The board includes outstanding economists who will ensure the intellectual cutting edge to this endeavor. 

 

Proven model.  Alongside the 30-year history of the E F Schumacher Society, we are introducing many of the successful programs of the New Economics Foundation, with its combination of innovative language, dramatic communications and cutting edge economics.  There will be differences in the US context, but we believe that – by partnering with other experienced US organizations where appropriate – successful programs can be translated.

 

Communications.  Communication is central to NEI’s work, in framing the new narrative, and translating what can be dauntingly difficult concepts into everyday concerns and viral stories, again learning from the model pioneered in the UK.

 

Transatlantic link.  The transatlantic link will be a conduit for a range of ideas that are still little known in the USA, including the economics of well-being, and new economic indicators of success.  It also means we can operate, and communicate, on both sides of the Atlantic simultaneously.

 

 

Immediate priorities

The board is convened.  The E. F. Schumacher Society has completed its organizational transition into the New Economics Institute.  The priorities now are to identify permanent leadership; to raise enough funding to support a New York City office and staff; to build on and maintain the Berkshire model local economic programs, publications, and Library developed over 30 years; to support appropriate adaptation of the programs of our London partners to a U. S. audience; and to move forward rapidly on a number of special initiatives.  These include the following:

1.      Launch a project on local economic development that can collect, develop and measure the most successful techniques available for rebuilding failing local economies, to knit together cutting edge developments on both sides of the Atlantic, and make these techniques more widely available to government and foundations at all levels in the USA.

2.     Catalyze the Great Transition, bringing together work already carried out by the New Economics Foundation, with scenarios developed by the Tellus Institute in Boston, to develop a vision of how we find our way to a successful, wealthy and sustainable future.

3.     Contribute to the New Economics Model, conceptualising and framing a model of an economy that can provide high well-being and employment despite dwindling resources.  This work will engage key economics pioneers, and will be used to challenge the prevailing economic model, which assumes endless economic growth fuelled by rising consumption.

4.     Apply the Happy Planet Index (maybe under a different name), the ground-breaking measure of ecological efficiency – “resources in, long and happy lives out” – pioneered by nef and downloaded over a million times around the world, to compare the performance of US states and companies.  This will be used to fuel the debate about measuring real progress, and to support other pioneers in the same debate, like the indicators project driven by Gus Speth (an NEI board member).

5.     Build the debate on how the financial services industry might be more useful, and relate new thinking in financial reform to real economic success, as part of the broader effort to achieve structural financial reform.  This will be carried out with our partners in the Capital Institute and others.

6.     Develop new economics curricula, using the 12,000 volume catalogued collection we already have in the New Economics Library at our Berkshire campus, in the body of research assembled by nef, and with material from other partners, to develop ready-to-use teaching materials and curricula on critical economic concerns.

 

 

Conclusion

Adam Smith conceptualized the possibility of accumulating capital – physical capital supported and represented by financial capital – to improve the human condition. His vision empowered two centuries of extraordinary advances in productive output for human consumption. Some of his followers made the simple mistake of confusing growth in Gross National Product with growth in real wealth and welfare; while others, like Ruskin and Schumacher, saw a growing divergence between the multiplication of goods and money, vs. improvements in the real wealth that includes happiness, human relations, and preservation of a healthy natural environment. E F Schumacher Society and New Economics Foundation, as the founding organizations for the New Economics Institute, draw their message from the tradition that critiques conventional economic theory insofar as it pursues only the intermediate goal of financial growth, ignoring the larger human goals.

 

The positive alternative in which NEI proposes to take the lead regards economics as a subset of other disciplines, including biology and psychology. The intention is to stitch together a broad understanding of the economic system, finding ways to fill remaining conceptual and practical gaps, so that economists and business people understand the world of the 21st century as it really is. This means building a theoretical framework, and alliances that can support an economics that puts ethics back into business – builds robust and independent local economies – rebuilds neighborhoods to underpin what Neva Goodwin (an economist on the NEI board) calls the ‘core economy’ of family and community – and nurtures the natural environment that supports all the rest. 

 

The New Economics Institute will work closely with an emerging network of other organizations concerned with developing the new economics. We will draw from their expertise and knowledge and provide them with a platform to present a positive and coherent message that a fair and sustainable economy is possible. We will draw from the successes and skills of the founding organizations for the New Economics Institute, to bring a new economics to scale in the critical American context.  We will outline and support the concrete steps required to make a peaceful transition to a new economy.