A New Set of Economic Principles – Five Principles for the New Economy by 2020
This paper was developed by Stewart, Manfred Max-Neef and 20 other people over a 3-day period at the Tallberg Forum in 2008.
By Stewart Wallis and Manfred Max-Neef
Principle 1: Designed to meet human needs to improve quality of life
- Meeting fundamental human needs
- Keeping door open to go beyond fundamental needs
- Full spectrum of contribution is valued
- Rights and responsibilities
Implications:
- Differentiate between satisfiers and needs
- New measurement systems
- Thinking globally
- Rewards for responsibility
Mechanisms:
- Alternative currencies
- GD happiness
- New tax systems
- Charter of human responsibilities
Principle 2: Economy is bounded by ecosystem limits
Implications:
- We do not erode natural capital
- Non renewable stocks will either be recycled or be replaced by renewables
Mechanisms:
- We have in place the means to restore eroded natural capital stock
- Fully price negative activities
- We fully account in price the negative impact of human behaviour
- Reward system with incentives to invite good behaviour
Principle 3: Equity for present and future generations
- Requires an economic system that is just, participatory, transparent and peaceful
Implications:
- Live within planetary boundaries – leave a better world for the future
- Directly tackle power distribution within markets and companies
- Income should be distributed in a way that does not hinder individuals’ abilities to:
- Achieve a secure, meaningful and ecologically sustainable livelihood
- Participate in the economy with their full potential
Mechanisms:
- Domestic:
- Free primary/secondary education
- College loan payback system
- Progressive energy tax
- Unified universal health care and portable social insurance
- New forms of company structure
- Globally:
- Social insurance for globally poor
- Migration rights
- Transnational deliberation on local/national/global policies
Principle 4: Reverence for life
- Moving from an anthropocentric to bio centric perspective
- All life as subjects, not objects
- Factoring into mystical/spiritual/existential/symbolic/aesthetic value
Implications:
- All forms of life part of the economic system - taking into account full cost and value of all forms of life
- Ownership needs to be redefined (stewardship)
- Recognition of nature as ‘natural investment’ – the value of the ecosystem (stocks, not just flows) and the intangible services these offer
- Paying for all the externalities that arise from our activities
- Technology only has limited answers e.g.:
- Looking after watershed versus building purification plants
- Appreciation of the whole, rather than fragmentation of the whole
Mechanisms:
- Financial analysis tools need to include life support systems (e.g. loss of biodiversity for commodity gain)
- Revise the indicators that we use to determine value
- Revise the concept of the time value of money e.g:
- rain forest an appreciating asset
- a dollar today has depreciation tomorrow
- Non relevance of national boundaries (e.g. transfrontier parks)
- Communities and mineral/biodiversity rights
Principle 5: Flexibility, innovation
- for sustainability, self realisation (for development, not growth)
Implications:
- Challenge existing optimisation process
- Safeguards needed to keep on right track
Mechanisms:
- Continuous learning and improvement
- Develop new incentives
- Education for open collaboration
