Economy for the common good: Fridays for the future for boomers

Profit is not everything in business – at least not for the Economy for the Common Good movement. Your goal is one literally a social market economy. But how is this supposed to work and what are the critics saying?

The highest possible prosperity with the best possible social security – this is the goal of the social market economy. We have lived in this economic order in Germany since 1948. The welfare state was supposed to be an improvement on pure capitalism, which contributed significantly to the political upheaval and two world wars. However, environmental crises, the coronation pandemic and growing social divisions have sparked many critical voices: how much of a role does our economic system play in these crises? And how is our market economy really social?

The social market economy is an economic form which, based on capitalist competition, instructs the state to make socio-political adjustments and to strive for social equilibrium. The social market economy developed after World War II and has been the backbone of the German socio-economic system ever since. (Source: Federal Agency for Citizenship Education)

Ole Müggenburg | Photo: Julia Schwendner

“This is where the economy for the common good comes in, because many people feel that the system is not fair and no longer exists for them,” says Ole Müggenburg. He is the International PR Coordinator of the Economy Movement for the Common Good (EKE) in Hamburg.

Traffic from Austria

Economy for the common good is the international name of a movement that appeared in Austria in 2010. It was initiated by the Austrian writer and activist Christian Felber, who founded the theme with his book “Economy for the Common Good”.

There are now 171 local movement groups, most of them established in Europe, but also in North and South America, Africa and Asia. In various working groups, members work on the overall concept, organize lectures and workshops or work on the European Commission.

Idea

Behind the common economic good lies the idea of ​​an alternative economic system. “It’s not about replacing capitalism entirely. Ultimately, it is an extended form of a social market economy, ”says Müggenburg. Companies as well as municipalities, cities and states should act in a manner oriented towards the common good.

The common good is defined as the common or comprehensive interest of society. For GWÖ, interests such as environmental sustainability, human rights, equal opportunities and satisfaction determine the common good. The economy for the common good has created incentives for enterprises to be guided by the following interests:

► Companies that behave in a manner oriented towards the common good gain an advantage in the economy.

Benefits can be, for example, priority in public tenders or lower tax payments. Firms less focused on the common good would therefore have to pay higher taxes. But who decides when a company is commons oriented or not?

System

“The right measuring instruments are also part of the common good economy. Thanks to them, the company is researched to determine how charitable it is. The matrix of the common good is one of the instruments for this measurement, ”explains Müggenburg. As a result, the company is checked against four universal values: human dignity, solidarity and justice, sustainable ecological development, as well as transparency and co-determination. Then it is checked how the values ​​are implemented by the company’s stakeholders.

stakeholders too Known as stakeholder groups, they are all internal and external groups of people who are directly or indirectly influenced by the company’s activities now or in the future. Examples: employees, suppliers, society. (Source: Gabler Wirtschaftslexikon).

Matrix of the common good, the economy of the common good
Common good matrix | ecogood.org

“For example, when it comes to the value of human dignity vis-à-vis suppliers: it checks whether people in developing countries are used in the low-cost labor supply chain,” continued Müggenburg. The study covers 20 fields of the common good matrix, and for each field there is a maximum of 50 points that can be achieved by the company.

Sequence

In the first step, the company performs a self-assessment with the support of the so-called social assistance consultants. It presents facts and figures and assesses with consultants which points can be achieved in a given field. Then the common good of the auditors, i.e. examiners, is at stake. They do a final check of the points.

They can agree with the company’s self-assessment or revise the points downwards. “The company has to disclose a lot of inside information for this assessment, such as employment contracts. The less information is shared, the fewer points there are ultimately in the field of transparency, ”says Müggenburg.

Upon completion of the test, a total value is obtained from the matrix. Then a public welfare report is prepared. Explains how the company realizes the values ​​of the common good and what is its development potential. Finally, by combining the points from the matrix of the common good and the report on the common good, a balance sheet for the common good for the company is drawn up. “The kind of sustainability report that many companies are already producing today, only without greenwashing,” says Müggenburg.

outstanding examples

So far, the Economy for the Common Good is a theoretical concept, but road examiners and traffic auditors already have a long way to go. In the meantime, 800 German companies have compiled a balance sheet for the common good, 503 of which have been published. Well-known examples are Sparda-Bank from Munich or the sports company Vaude from Baden-Württemberg.

What does this contribute to the mainstream economy?

“It is a management tool that you can use to accompany companies and help them transform them towards true sustainability. Many companies want to achieve sustainability but are wondering what that means and how can it be measured, ”explains Müggenburg. Moreover, there is a clear trend towards transparency. Society is changing towards the common good.

Under the pressure of the pan-European economic crisis and debt, as early as 2012 eight out of ten Germans wanted a new economic order. This should focus on environmental protection, the prudent use of resources and social sustainability in society. According to a survey conducted by TNS Emnid on behalf of the Bertelsmann Foundation, only one in three believes that the current problems will be solved by self-regulatory behavior in the market.

Consumers are increasingly interested in the history of the products they buy. Where do they come from, has anyone been used to do so and what happens to the money collected? Companies that have already compiled balance sheets of public values ​​report this on their websites. “It’s a permanent seal – simply related to the economy,” says Müggenburg.

Objective

Ultimately, however, the movement is about a great transformation of the system. The economy for the common good should be a response to widespread crises:
Climate, pandemic, biodiversity, social crisis, economic crisis.

Does money rule the world?

Professor Dr. Sven Schulze does not see the future in the common good economy. He is professor of economics at HAW Hamburg and deals with, inter alia, environmental economics.

Prof.  Dr.  Sven Schulze, professor at HAW Hamburg
Prof. Dr. Sven Schulze, Professor at HAW Hamburg | Photo: GbR economic trend research

For him, goodwill surpasses feasibility: “Movements like this come from a certain social group that wants to spread its views to the world. A typical feature of such movements is the lack of a theoretical and empirical basis. ‘

Its basic problem is the assumption that all people are only chasing after money. “But it’s just too easy for you,” says Schulze. Man is not happier the more money he has, but up to a certain limit, prosperity clearly depends on wealth, and therefore also on money. “So not everyone is chasing money, everybody is chasing their little wealth, and I think it’s entirely legitimate,” he says.

incentives? Yes. Common good economy? no

In economics, there is a simple approach to changing the behavior of the people involved: setting incentives. For example, in climate policy, negative incentives should result in fewer CO2 emissions if companies and countries have to pay penalties for doing so.

In an economy for the common good, the emphasis is on positive incentives, such as reducing the payment of taxes and greater emphasis on the common good. Schulze is also critical of this: “It may sound better to reward good behavior rather than punish bad behavior. But for that, you need financial resources first. ” If all companies in the common good economy were to operate in a public good-oriented manner, where would the state get the tax money to finance the incentives?

better world

Schulze and Müggenburg agree that successfully implementing such an alternative economic system would be a long process that would have to overcome many obstacles. Schulze sees Economics for the Common Good as a niche movement. Müggenburg disagrees: “Many of the little things in the common good economy are already having an impact as society is changing and our values ​​are slowly becoming mainstream,” he says. Economic changes are needed to counteract major crises. Schulze and Müggenburg share this opinion.

Cover photo: Pixabay | LeoSch and Elisa Riva
Collage: Mia Holland

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