An alternative system, urgently needed

Head of Communication
14/07/2021

If our current problems derive from a failed system, the alternatives need to be systemic too. And The New Systems Reader undertakes a vast line-up of ideas. The book is a compilation of 29 essays that approach the topic of ‘systems’ from different perspectives. It forms part of The Next System Project by The Democracy Collaborative, an American-based initiative that was launched in 2015 to promote systemic solutions “for an age of systemic crisis”. The starting point of The New Systems Reader is the inability of traditional politics and policies to address the problems of our time – including growing inequalities and the climate crisis – which prompts a major rethink of the imperatives of economic growth.

As David C. Korten, one of the contributors, puts it plainly: “we have created a system of culture, institutions, technology and infrastructure that is driving us to self-extinction”. Fundamental changes are therefore needed to the way our economy and society functions. The New Systems Reader is refreshing in the sense that it does not address policy proposals that could improve the current system, but tries to propose more daring, some would say utopian, ideas to map out potential futures for our societies.

The editors, James Gustave Speth, founder of the World Resources Institute and co-chair of The Next System Project, and Kathleen Courrier, a former vice president of communications at the American Institutes for Research, have selected a representative sample of the most important proposals to address the system question. Although most of the contributors are American, the book can be a useful source of inspiration also for European progressives, in light of the pivotal times in which we are living, to think about how to change the ‘rules of the game’ of our economy more profoundly. One of the contributors, Lorenzo Fioramonti, clearly explains the extent to which these current rules shape behaviours, define incentives, guide collective action, and thus dictate political decision-making.

The book reads as a harsh critique of our current model, especially the American capitalist system, but it is also a recognition of the failure so far of the social and environmental movements to really transform it. Speth sees a troubling paradox: “our environmental organisations have grown stronger and more sophisticated, but the environment has continued to go downhill”. Henning Meyer meanwhile describes how the rise of the Third Way in the 1990s made Social Democracy almost indistinguishable from its political competitors, and left it intellectually unprepared to come with a credible alternative political offer when it became clear that the old-fashioned talk of the instability of markets was not all that outdated after all. Instead of transactional policymaking, Henning Meyer argues that progressives should develop a new democratic partnership, and clearly prioritise general social goods – such as inclusion, education and health – over market interests.

A redefinition of ‘public goods’ or ‘commons’, in order to reduce the space for pure profit-seeking markets, is a recurring theme. Christian Felber and Gus Hagelberg thus propose an “Economy for the Common Good”, which encourages private enterprise – but only within the confines of a common good framework that is based on a matrix indicating to what extent a company practises the values that are central to society. The matrix should then be continually improved in an open and democratic process, and would create the basis for a “Common Good Balance Sheet” that would be externally audited. To offset the higher costs resulting from ethical, social, and ecological activities, the authors propose that advantages in taxation, bank loans, public grants, and contracts should be offered.

Similarly, Marvin T. Brown underlines that the goal of the economy should change from being economic growth to making provisions for all. In this model, it would not be companies that decide what they give back to society, but the “corporate civic obligations” to which they are subject.

Only a few of the contributors call for a full break with capitalism, although Hans A. Baer espouses a democratic eco-socialism that moves towards public ownership of the means of production (state ownership, worker-owned enterprises, cooperatives). Richard D. Wolff meanwhile calls for enterprises that are self-directed by workers, and in which each employee and employer has one vote in deciding what the company produces, what technology it uses, where production is located and what is to be done with the revenues.

David Schweickart’s economic democracy keeps the ‘good’ part of capitalism – competitive markets for goods and services – but replaces most wage labour with cooperative labour, and develops a more democratic mechanism for handling investment to replace the financial markets. This mechanism would involve creating a national investment fund, which would be generated via a flat-rate property tax on all businesses.

Jessica Gordon Nembhard proposes a cooperative solidarity commonwealth – a system of interlocking cooperative ownership structures in all industries and all economic sectors, which support one another by building interlinked supply chains, collaborating on projects, and sharing funding.

The common article of the members of the Community Economies Collective meanwhile underlines the importance of developing a broader narrative for economic action – away from the essentialist vision of capitalism that limits the ‘real’ economy to wage labour, commodity and production for markets, and profit-seeking companies. A vast array of very relevant economic practices take place below the tip of the iceberg, and these should be identified to undergird a community economy. In essence, the authors of this essay propose defining and recognising different forms of work beyond paid work (to include different non-capitalist and alternative business types), transactions beyond markets (to include household flows but also fair trade, local trading systems), property beyond the private property that has long been promoted as the most efficient (long-term leases, community trust, open access), and finance (credit unions, microfinance, interest-free loans).

It is striking that almost all the authors highlight the importance of local, bottom-up approaches to reach a new system. Andrew Cumbers, for instance, calls for a dispersion of economic decision-making. This would be decentralised across society, and would have democratically controlled public ownership at higher levels while leaving control of most other activities to communities.

Despite all the contributors sharing a similar assessment of the problems in the current system, they each end up somewhere different, which makes it difficult to point to a single destination. As the editor himself says: “this forest of ideas is so thick that the problem is trying to forge a meaningful path through it”.

The New Systems Reader has the merit of confirming – once again – that different alternatives need to be envisaged for the future, and that ideas are abounding. It is a powerful invitation to keep thinking out-of-the-box in order to create a better world. But to become really impactful, more clarity is needed on the destination of the journey. The challenge is therefore to choose the right one and find the way to get there.

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