Economy for the Common Good
|Formation||October 6, 2010|
Economy for the Common Good as a global movement is attractive to community-led initiatives as it stresses the common good as the main goal of all economic activity. The first time the phrase was used was in Christian Felber's 2010 book The Economy for the Common Good (published in German with the full title Die Gemeinwohl-Ökonomie - Das Wirtschaftsmodell der Zukunft). In the book Felber advocates a shift from the existing financial balance sheets to a common good balance sheet.
Purpose of Economy for the Common Good
One of the mainstream narratives supporting capitalist system is that profit-driven activities bring socio-economic progress and overall prosperity (Friedman, 1970). The ECG argues that, on the contrary, the profit-maximizing behaviour creates a wide range of problems, including social exclusion and environmental degradation (Felber et al., 2015). The envisioned solution, therefore, is to change the purpose of the economic system from financial gain to universally accepted values of appreciation of people and nature. These values are more specifically defined by the ECG as dignity, solidarity, ecological sustainability, social justice, transparency and democracy. The notion of the common good implies that production-consumption systems operate within the regenerative capacity of natural ecosystems while inequalities in income, wealth and power are kept to a minimum.
History of Economy for the Common Good
Main page: History of the Transition movement
The ECG’s history started in 2010, when Christian Felber published the book “Economy for the Common Good” and, together with 15 entrepreneurs, took the Common Good Balance Sheet (CGBS)—a tool for sustainable reporting—to the public. In 2011, the first local “chapters” (i.e., “networks of people who play active roles in the overall movement” were established. By 2020, the ECG is supported by over 300 companies (mostly small and medium enterprises) and it currently has over 100 local chapters worldwide, the majority of which are concentrated in Europe (ECG, 2020)
Narrative of change
Read more about the concept of narrative of change
Scope of Economy for the Common Good
The ECG’s main actions are focused on a bottom up change by helping companies, municipalities, NGOs adopt the CGBS. The CGSB attempts to capture comprehensively the ethical and sustainability aspects of all economic activities of an organisation. It is designed to provide a public account of the degree to which an organisation commits to and implements social, economic and environmental sustainability (Felber et al., 2019). The ECG supports the adaptation and implementation of the CGBS by giving public talks, offering practical support and creating a transnational network, among other activities. By voluntary publishing the outcomes of the CGBS, private companies, NGOs or public institutions are also expected to play a role in raising awareness among other organisations and consumers about sustainability issues.
Initiatives in numbers
Links to key examples
Numbers of people involved, and indirect beneficiaries
Impacts of Economy for the Common Good
The ECG has a different impact on different types of actors. Representatives of high authorities, for instance, mostly remain committed to the narrative of capitalist, growth-oriented system, while regional authorities, NGOs and private companies are already exploring and supporting alternatives. In 2017, the towns of Mäder and Nenzing in Vorarlberg became the first certified Common Good Municipalities in Austria. In Stuttgart, Germany, two city-owned enterprises have completed Common Good Balance Sheets in 2018. In February 2019 the city council of Mertzig, Luxemburg unanimously voted to become the country’s first ECG Municipality. The City of Amsterdam included the ECG next to the Doughnut Economy and the B Corps in its Amsterdam Impact Action Program 2019-2022.
The relative success of the ECG can be explained by the fact that it focuses, among other things, on the goals of the economic system and the mindsets that support it. The tone of communication matters too. The ECG employs the power of a positive story by not just stating problems related to capitalism, but offering concrete vision and tools. This experience indicates that the diffusion of messages that predominantly ‘diagnose’ a problem—which is happening, for example, through the acts of civil disobedience by Extinction Rebellion, protests by students across and beyond Europe, and IPCC reports—is not enough to accelerate sustainability transformations. Furthermore, the case of the ECG shows how change can come from bottom-up, which means that other organizations that aim to advance sustainability transformation, might want to especially concentrate their efforts on non-governmental organisations, small and medium enterprises, and local authorities.
Impacts in other dimensions
Research on Economy for the Common Good
The ECG is still a young organization and its potential to have a transformative effect on businesses and authorities is yet to be tested. The main ideas of the ECG, however, align with the concepts of social enterprise (Campos et al., 2020) and degrowth business framework (Nesterova, 2020), which indicates a growing consensus on the role of businesses in a sustainability transformation beyond profit maximization and capital accumulation. More research is still needed to advance the understanding of interconnections between micro and macro processes of change, and high-level policy-making and action-on-the-ground, to gain insights into how those can mutually reinforce each other to keep the transformative momentum.
Criticism of Economy for the Common Good
The ECG is sometimes being labelled by its opponents as ‘Marxist’ or ‘communist’ organization that can lead to ‘Common Good Dictatorship’, loss of jobs and eventually recession through excessive regulations. The ECG separates itself from this discourse by underlining its compatibility with the market economy. The ECG proponents emphasize that people want a different, more ethical system – which is manifested through the results of various opinion polls, a growing number of social enterprises, as well as doubts about the usefulness of GDP as a measurement of countries’ economic performance. The CGBS is presented as a tool that can help to achieve UN Sustainable Development Goals that represent yet another expression of an international will to build a more fair and ethical society. Moreover, the ECG is framed as an economic opportunity: higher sustainability standards will create beneficial conditions for small and medium enterprises and will facilitate job creation (Koretskaya & Scholl, 2019).
Felber, C., Campos, V., & Sanchis, J. R. (2019). The common good balance sheet, an adequate tool to capture non-financials?. Sustainability, 11(14), 3791.
Felber, C.; Nurmi, S.; Maskin, E. Change Everything: Creating an Economy for the Common Good; Zed Books: London, UK, 2015.
Friedman, M. (1970). A Friedman doctrine: The social responsibility of business is to increase its profits. The New York Times Magazine, 13(1970), 32-33.
Hickel, J. (2020). Less is more: How degrowth will save the world. Random House.
Koretskaya, O., & Scholl, C. (2019). Towards a Framework for Understanding Discursive Regime Destabilisation: A Case Study of a Social Movement Organisation “Economy for the Common Good”. Sustainability, 11(16), 4385.
Nesterova, I. (2020). Degrowth business framework: Implications for sustainable development. Journal of Cleaner Production, 121382.
Vandeventer, J.S.; Cattaneo, C.; Zografos, C. A Degrowth Transition: Pathways for the Degrowth Niche to Replace the Capitalist-Growth Regime. Ecol. Econ. 2019, 156, 272–286.
Wallerstein, I. M. (2011). Historical capitalism: with Capitalist civilization. Verso Trade.