Transitioning to a New Economy

Painting by Max Maynard

Over the past year we have all watched in amazement as the old economy unraveled before us—banks failing, established corporations seeking bankruptcy protection, unemployment increasing, climate change progressing unabated, and governments nervously printing currency hoping to buy their way out of these problems. The urgency of shaping a new economy—one that is fair and sustainable, that functions within ecological limits, and takes into account people and cultures throughout the world—has never been clearer.

A successful transition to a new economy in which people and the earth have a higher priority than financial return will require a restructuring of institutions and governance frameworks; changes in values and behavior; hard decisions; and decisive actions on the part of individuals, communities, civil society, firms and governments throughout the world. If such a transition is to be successful, it will need to be rooted in robust systemic analysis, employ effective hard-hitting advocacy, and offer proven, practical solutions. In addition, it will require a coherent and encompassing narrative that is both compelling and accessible and that draws together the various components of a complex picture in such a way as to stimulate and support action at all levels.

Parts of the new economy are already known and underway.

  • In North America, Wendell Berry is our finest poet of a new vision, describing the mutual support at the heart of a community economics in his stories and essays about rural life.
  • Jane Jacobs vividly paints the picture of vibrant, complex, import-replacing city regions as engines for diversified production in her Cities and the Wealth of Nations.
  • David Morris’s Institute for Local Self Reliance is developing local and national ordinances that encourage rather than discourage small business development.
  • Judy Wicks has united green entrepreneurs in regional Business Alliances for Local Living Economies.
  • Peter Barnes reminds us that land and air and oceans and minerals are all part of the commons and as such their use should be limited, with income derived from their use distributed to all stakeholders.
  • Gar Alperovitz has long articulated the benefits of distributed ownership and has promoted the tools for accomplishing such shared wealth.
  • Winona LaDuke is re-inventing the economy of tribal nations by regathering lands lost to tribal control and reintroducing traditional production methods.
  • Majora Carter and Van Jones understand that green jobs—retrofitting homes and workplaces to make them more energy efficient and restoring polluted sites—can help to renew our inner cities while providing dignified employment opportunities.
  • Amory Lovins’s Rocky Mountain Institute is exploring technologies for a new economy and how to make such products economically viable.
  • The Center for a New American Dream and Green America are teaching the individual and corporate consumer to change long-established patterns of buying to cause less impact on the Earth.
  • Community Supported Agriculture (CSA) farmers are making the growing of food a visible process and educating a new generation about the importance of sourcing food locally.
  • Wes Jackson’s The Land Institute is challenging our agriculture system’s dependence on annual crops by breeding perennial grains; his is a 100-year vision.
  • Woody Tasch’s Slow Money Institute and other innovative social investment groups are devising how to finance a new economy.
  • The Transition Town movement is energizing discussions in town after town about what citizens can do to reduce dependency on global imports and return to using locally sourced goods.
  • Local currencies such as BerkShares have captured the imaginations of activists and economists alike as an effective tool for keeping wealth circulating in a region and effecting greater economic self-determination.
  • Academic institutions such as the Ecological Economics program at the University of Maryland under Herman Daly, Robert Costanza’s Gund Institute at the University of Vermont, and Neva Goodwin’s Global Development and Environment Institute at Tufts University are reshaping the study of economics to factor in the social and environmental costs of production.
  • Hazel Henderson, a pioneer thinker on green economics, continues to influence a younger generation to challenge existing financial systems and create change.
  • Joseph Stiglitz is setting an example for fellow economists to rethink all established economic assumptions in order to forge a new economy.
  • Gus Speth, Bill McKibben, David Boyle, Peter Victor, Benjamin Barber, Michael Shuman, David Korten, and Juliet Schor are among a growing list of authors writing about a new economy, and through their writing, building the imagination to get us there.

And there are others.

What is needed now is some entity to bring these various organizations and individuals together, to frame a common story, to tell it in multiple voices, to strategize the steps towards implementation, and to take collective action to achieve the transition.

We see the Schumacher Center as a collaborative, open, inclusive, value-added think tank working closely with existing organizations and research programs to:

  1. Identify and fill gaps in knowledge;
  2. Package together various presently isolated strands of work into a coherent and encompassing narrative;
  3. Present these so as to achieve maximum impact on public and political debate, individual and business behavior, and public policy;
  4. Support existing organizations by building the profile of a coherent new economics; and
  5. Build a network of fellows from partnering organizations to engage in specific projects, research, or campaigns.

In Small Is Beautiful: Economics As If People Mattered economist Fritz Schumacher drew from a broad palette to develop what he called “an economy of permanence.” He wove together culture, society, ecology, scale, technology, and governance as necessary and related factors in shaping a new economy.

The Schumacher Center in the Berkshire region of western Massachusetts has a thirty year history of building on Schumacher’s interdisciplinary approach to economics—stewarding his library and archives, providing a venue for new voices in the field, convening conferences, publishing papers, and transforming ideas into action through model economic programs in its home region. It is gaining extensive media recognition for its work on decentralizing and democratizing the institutions of land, labor, and capital.

In its twenty-two years of work similarly borne out of Schumacher’s thinking, the New Economics Foundation (NEF) in London, has developed an impressive record of applied research and public policy initiatives at the local, national, and international level. NEF is acknowledged by British media as the voice of a New Economics. Its diverse campaigns have gathered organizations together in common cause and have bettered the lives of people in small villages around the world and in the neighborhoods of bustling European cities.

The Schumacher Center and NEF recognize that their combined fifty-year history of providing the theory and application of a new economics on both sides of the Atlantic, uniquely positions them to contribute to the building of a new initiative. Accepting this responsibility, the Schumacher Center is partnering with NEF. We will keep you informed of developments.

A friend commented that what she likes about the proposed partnership is that it is addressing multiple issues from one root source—the transformation of our current economic system. That engages and inspires her, as it does us.

We welcome your comments and support.