Life-Centered (Wellbeing) Economics for the 21st Century
Nov 13, 2020
by: Sandra Waddock
There is a lot of talk today about bouncing ‘back’ or returning to what passed for normal before the COVID-19 pandemic disrupted the world and everyone’s lives. But there is a huge problem with that idea.
Despite many calls to ‘bring back’ the system as it was, and efforts by governments and business leaders to do so, many economic, work, educational, and social systems have already changed in unpredictable ways that make a complete return to pre-pandemic conditions unlikely.
Something else important is happening, too. The pandemic has raised awareness that the economic drivers that shaped the prior ‘normal’ have created many problems—including existential crises like climate change, species extinction, and inequality. Some observers have even laid the COVID-19 pandemic at the feet of overly aggressive exploitation of nature.
So the real question is, what will our economic and social systems look like after the pandemic if we can indeed do what WEAll suggests and ‘build back better’ or ‘bounce beyond’ today’s economics?
Today’s dominant economic drivers include beliefs, or what the late systems theorist Donella Meadows called mindsets, that form an economic paradigm. That paradigm— neoliberalism —has been used to justify growing inequality, ignorance of environmental impacts, and a drive towards ‘efficiency’ that justifies layoffs, abusive conditions in many companies’ global supply chains, and cutthroat competition. The most vocal proponent of this flawed set of beliefs was the late Milton Friedman.
Neoliberalism claims that markets are and need to be ‘free’, that people are self-interested profit maximisers—and so are companies. That the best governments are the ones that exert the least regulatory or legal influence on the powers of business. That endless growth is the goal of economies and companies. That companies’ only social responsibility is to maximise profits for one group of stakeholders—the shareholders, as Friedman put it in a famous and influential, yet problematic, New York Times article in 1970.
Neoliberalism’s flawed and problematic orthodoxy (a generally accepted theory, doctrine, or practice) remains deeply embedded in both business practice and governmental focus on flawed measures like GDP. The thing is, as my recent paper ‘Reframing and Transforming Economics around Life’ (published in Sustainability) argues, what the world really needs now is not another attempt at reforming the current framing, but a completely new economicorthodoxy.
The world needs an economics that favors life in all its aspects. One that fosters wellbeing for all humans, as well as non-humans. That economics needs to be built on powerful precepts— ‘memes’ or core building blocks of culture—that resonate broadly yet are considerably more holistic than those of neoliberalism.
My paper argues for six synthesised precepts or building blocks, for Wellbeing Economics, drawn from a wide range of literatures.
1. Stewardship of the Whole
Stewardship of the whole is foundational. Simply put, this means that leaders, governments, communities, businesses, and other institutions and, indeed, all of us, have shared responsibility for ensuring that the ‘whole’ system, including the planet itself, is healthy and supporting all of life for the foreseeable future. Living systems, including communities, organisations, and Earth itself, are healthy when all of their parts work together productively—when the ‘whole’ is considered, not just the parts.
2. Co-creating Collective Value
Economic activity can be positive or negative (think the clear cutting of forests). This is why the focus of today’s economics on the growth of money as the sole way of assessing wellbeing is incredibly narrow-minded. Many other values, though perhaps not as readily measured as monetary outcomes, are important to humans, including health, relationships, community, meaningful work, and belonging, among others. Thus, another precept that underpins health, life, and wellbeing is co-creating collective value. Scholars Donaldson and Walsh argue that generating collective value should be the core purpose of businesses. Many important societal values that lend ‘life’ to human systems can be included in such a metric, as the Genuine Progress Indicator demonstrates.
3. Cosmopolitan-localist Governance
Another core precept is cosmopolitan-localist governance. Given today’s technologically connected world, it is possible to create local governance systems in which citizens can have voice, input, and impact, and connect those to the global system. Cosmo-local governance, as it is sometimes called, relies on this connectivity, while decentralising decision making as much as possible, and allowing for communities to create and share ideas, knowledge, skills, technology, culture, and ecologically sustainable resources.
4. Regeneration, Reciprocity, and Circularity
Cosmo-localism is complimented by an approach to production of goods and services that emphasises regeneration, reciprocity, and circularity. The idea here is to produce goods and services in alignment with the natural environment’s capacity to regenerate them, to operate in accord with nature’s own principles, in which exchanges are reciprocally balanced as inputs and outputs, and avoid toxic by-products (or products). Circularity avoids the take-make-waste approach too often used today, and instead adopts the idea of ‘waste equals food’, as some ecologists put it— which suggests that what is waste for one part of the system, needs to be reused as ‘food’ (inputs) in another part.
5. Relationship and Connectedness
In contrast to neoliberalism’s strong bent towards individualism and individual responsibility, economics for all of liferecognises the idea of relationship and connectedness as foundational to what it means to be human—and what it means to exist in a complex world where physicists tell us, everything is connected. Human beings thrive in the context of relationship—and indeed, cannot survive on their own. The South African principle of Ubuntu,the idea that ‘I am because we are’, and the Lakota principle of Mitikuye Oyasin, or the idea that ‘all are related’ (sometimes translated as ‘All my relations’) reflect the core principle of relationships and connectedness.
6. Equitable Markets and Trade
Since we are all connected, equitable markets and trade needs to replace the flawed idea of free markets and trade—because how we treat each other in markets and trading situations matters. Equitable or fair markets/trade offer fair and fully costed products and services, with all costsinternalised, because otherwise, they are absorbed by and harm societies and the natural environment. It also means producing goods and services that are actually needed by customers and recognising the importance of good—and participative—governance over their fairness.
There’s much more that could be said about each of these principles.
The key idea here is that to make progress towards a Wellbeing Economy, many more progressive initiatives need to come to agreement about what the core ideas are, that would drive such an economy.
My paper is intended as a start on that conversation, though by no means is it the end point.
Dr. Sandra Waddock is the Galligan Chair of Strategy, Carroll School Scholar of Corporate Responsibility and Professor of Management at the Carroll School of Management at Boston College. Sandra has published well over 100 articles on corporate citizenship, sustainable enterprise, difference making, wisdom, stewardship of the future, responsibility management systems, corporate responsibility, management education, and related topics. Her research interests are in the area of macro-system change, intellectual shamanism, stewardship of the future, wisdom, corporate responsibility, management education, and multi-sector collaboration.
Faces of the Wellbeing Economy Movement is a series highlighting the many informed voices from different specialisms, sectors, demographics, and geographies in the Wellbeing Economy movement. This series will share diverse insights into why a Wellbeing Economy is a desirable andviable goal and the new ways of addressing societal issues, to show us how to get there. This supports WEAll’s mission to move beyond criticisms of the current economic system, towards purposeful action to build a Wellbeing Economy.