by Ronald Logan
We know it cannot be the centrally planned, state-owned, forced-equality, command economy of communism. But in dismissing communism it should be pointed out that while differences are great between the communist economy and the capitalist free market economy, they are both forms of capitalism. The communist system is state capitalism and the free market system is a mix of group and individual capitalism. Both are forms of capitalism, so there is much shared logic and, therefore, similarity in their defects.
Business philosopher Michael Novak, in his effort to articulate a “theology of capitalism,” takes a view of capitalism much like the view that Winston Churchill took toward democracy: that it is a terrible form of economy except in comparison to the alternatives. Novak’s assumption that humanity is stuck with capitalism as the best alternative available is shared, at least implicitly, by the reform movements that are attempting to humanize capitalism and attenuate its damaging social and environmental impacts.
But the challenge of humanizing capitalism is daunting. Capitalism cannot deal with the external costs of industrialism. It has little care for the well being of the biosphere. It does not insure that wealth is used to the benefit of all. It does not empower local communities to shape their own economic destiny. And it does not treat humans as spiritual beings or recognize the spiritual unity of existence.
There are many, and their numbers are growing, who are not so willing to accept the inevitability of capitalism. E.F. Schumacher, as a noted example, aspired to an “economics as if people mattered” and advocated for a human-scaled, decentralized economic system.
If humanity must go beyond the capitalist paradigm to survive and prosper, what would an economic model look like that optimally meets human needs? Here are some of the significant features of an ideal economic system.
Cosmic inheritance. Capitalism’s principle of individual ownership rests on a materialist conception of wealth. The Progressive Utilization Theory or PROUT, by contrast, is based on a spiritual conception of wealth. As PROUT’s founder, P.R. Sarkar explains this conception, “This universe is created in the imagination of the Supreme Entity, so the ownership of this universe does not belong to any particular individual; everything is the patrimony of us all. Every living being can utilize their rightful share of this property. . . . This whole animate world is a large joint family in which nature has not assigned any property to any particular individual.” This concept of wealth is termed cosmic inheritance. According to this outlook individual ownership of wealth cannot be accepted as absolute. Everyone has the right to use the wealth created by the Cosmos, but none but the Divine Entity can claim ultimate ownership. The cosmic inheritance view of the ownership of wealth is consistent with the values held by most indigenous peoples.
Economic decentralization. The decentralist tradition has been espoused by, among others, Thomas Jefferson, Peter Kropotkin, E.F. Schumacher, Mahatma Gandhi, and Wendell Berry. Economic decentralization must be made a central objective of the new, humanistic economy. Hawken’s natural capitalism speaks of the need to “replace nationally and internationally produced items with products created locally and regionally.” But it does not seem to appreciate how problematic this is within a capitalist economy, which has a natural tendency to irrevocably move toward globalization. A human centered economy, by contrast, will tend toward localization.
Worker-managed economy. The three most effective production incentives are profit-sharing, distributing equity, and access to participation in decision-making. These methods for increasing worker motivation tend to be mutually reinforcing. For example, the incentive effect of profit-sharing is magnified if workers are empowered with the decision-making authority required to implement innovations. The form of enterprise in which all three of these incentives approaches are maximized is the worker-owned and managed cooperative. Cooperatives are best suited to elicit the productive potential of workers, and should therefore be the predominant form of economic enterprise. Cooperatives also minimize worker alienation, promote equitable distribution of wealth, and foster economic decentralization.
Consumption-motivated economy. Capitalism is a profit-motivated economy. In the quest for profit, industries are established where labor costs are lowest, powerful ad campaigns are conducted to entice consumers to buy junk, companies are purchased in leveraged buyouts and their assets plundered, and responsibility for environmental pollution is avoided. Now making profits cannot be ignored, as occurred in Soviet style state-run enterprises, but neither should it serve as the central rationale of economic activity. The central purpose of economic activity should be to meet the needs of people. So a humanistic economy should be consumption-motivated. Such an economy would increase the availability of consumer goods, and at prices that are affordable. It would also work to increase people’s purchasing capacity and see that none are without the earning power needed to acquire their basic necessities.
Economic democracy. Concentration of economic power and wealth perverts the political process. Moneyed interests finance campaigns, influence legislation, and corrupt regulatory agencies. In many developing countries, money buys votes outright. And the moguls of capital maintain the ultimate veto power of capital flight, so that if government policies are enacted which threaten their financial interests, they can move their capital out of the local or national economy, leaving behind economic ruin. For democratic governance to be of the people, by the people, and for the people, economic power must be dispersed. Said another way, democracy must be extended beyond the political sphere to include popular participation in the control of capital and the control of economic decisions.
Self-determined regional economies. People can best coordinate social and economic development when they share certain unifying factors, such as a common culture, shared economic potentials and problems, similar geography, and a common sentiment about their heritage. Such factors organically define regional socioeconomic units. Social and economic development undertaken within such regional units can be easily adjusted with local conditions, and so development can be better geared to satisfy human needs. For locally sensitive development to take place, regional economies need to have control of their resources and capital and to be free from domination by outside economic forces.
Balance. Balance is essential to all living systems, and balance needs to be restored to human society. In no realm is this more true than in the realm of economics. As detailed in the World Commission on Environment and Development’s report, Our Common Future, most of the disruption of ecological systems is driven by economic forces. An ideal economy should exhibit the stability of process that is found in natural systems, not the disruptive growth processes found in cancer cells.
Neohumanistic values. The philosophy of humanism uses human welfare as the measure of social good. However, our world is the home not only of humans, but of all of Earth’s life forms. So PROUT is based on a neohumanist value system that recognizes the existential rights of all living beings. Economic activity would not be allowed to violate the right to existence and expression of other species. It is not sufficient to want “an economics as if people matter,” as E. F. Schumacher called for. What is required is an economics as if living beings matter. The neohumanistic outlook recognizes that humanity exists within the larger web of life, so that any harm we do to the web will ultimately affect us as well.
Spiritually based concept of progress. There is now much discussion about how best to conceptualize and pursue sustainable development. But generally absent from this discussion is consideration of the purpose of development. If the purpose of development is, as presently conceived, to increase material amenities, then sustainable development will result in little more than maintaining our materialist lifestyle without destroying the environment. But it will not help us attain inner fulfillment. For this we must reorient our idea of progress from a narrow focus upon material increase to the inclusion of movement toward self-realization. As people cannot pursue spiritual growth without a supportive material environment, a spiritually based conception of progress should include recognition of the need for material development. The purpose of development then becomes to aid our search for inner peace, not to fill our lives with things that empty our existence of meaning.
A More Powerful Vision
The humanization and greening of capitalism is a well-intended response to the critical need to deal with the detrimental by-products of capitalist investment, production, and consumption. Such initiatives as green consumerism, socially responsible investing, and ethical businesses deserve popular support. Progressive-minded people should embrace new ways of consuming, investing, producing —building up new behaviors and new institutions that bring change from within the present economy.
But if we stop at this much, the problems facing humanity will only worsen. More fundamental solutions must be implemented. No matter how much scope there may be within the capitalist economy to humanize production, protect the environment, support social justice, and vitalize local communities, this system is simply unable to fulfill human needs on a universal basis.
We should embrace the progressive reforms of the green capitalists, but not embrace the limiting and defective premises of capitalism, for humanity is in need of a more powerful vision – one that embraces the fullness of our spirit and the greatness of our human potential.