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What’s the Economy For?
A Flourishing Commonwealth of Life

TO CONSIDER WHAT THE purpose of the economy is, it may help to begin with a small snapshot of an economy working in right relationship.

When members of the community of Woodstock, New Brunswick, organized the Woodstock Farm Market in the 1970s, they made a few rules: local producers selling their own produce only, and no produce from wholesalers allowed. Right off, however, the organizers had to make some exceptions that seemed fair and consistent with the spirit of the market. For example, if your neighbor had extra strawberries, it was okay to put them on your table as a favor. And they would allow one particular vendor who brought fresh fish from the Bay of Fundy to set up a table, as the townspeople really wanted fresh seafood, and what he brought was as “local” as seafood was going to get.

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Baked goods, jams, jellies, and pickles had to be homemade. Craft items had to be locally made, as well. The emphasis on local production was not only a matter of providing opportunity for local growers, but an effort to help build an ecologically sound local food system. Many growers who sold at the market ran small-scale, environmentally respectful operations. In many cases, vendors favored organic methods. The market also served as an information exchange network on sustainable practices for local conditions.

Sometimes, “local” got stretched pretty far if the product was not already offered by an area vendor. For example, a family from the next county brought in lawn furniture made from native white cedar. A vendor of ready-to-eat foods came from a considerable distance; his German sausages were a big hit. The market manager constantly had to work with the board of directors to make decisions on what fit within the guidelines and what made sense for the organization’s development.

The founders wanted their market to be a place for direct selling by the producers. When peddlers who didn’t meet the criteria asked for space, the Woodstock Market had to refuse them, and explain why. Sometimes they would set up just outside the market to take advantage of the crowd, and then the market manager had to confront them with an argument about purpose and fairness. Sometimes they refused to leave. The town backed up their farm market managers in these instances, and before long the word got around. Most people respected what the market was trying to do and found the rules reasonable.

Then the Woodstock Farm Market ran into pricing issues. Each vendor was free to set the prices for produce offered. But the members said, let’s be fair about it. When various crops come in, let’s check with each other on what we consider a fair price and pretty much stick with it. It does make sense to set different prices for differences in quality, and maybe do a little markdown or make bulk deals at the end of the day. But beyond that, if we try to outcompete each other we all lose. We will informally school new vendors in our ways of market pricing.

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Occasionally someone set a price that undercut the rest, especially when tomatoes came in. The manager talked it over with the price-cutter and usually got cooperation or maybe a compromise. If not, word spread, and the price-cutter soon found the market to be a rather uncomfortable place to do business. Some didn’t care, but then they usually didn’t last long. Members eventually came to know each other and wanted everyone to sell enough to make it worth coming back. So they cooperated.

The story of the Woodstock Farm Market is the story of an economic market. But it is also the story of how the purpose of that little market economy grew from the community and folded back into it. That is a market that is embedded in the norms of the community and sees that community in its ecological context.

Simple questions often have unexpectedly complex answers. “What is the purpose of the economy?” is such a question. Getting the purpose of the economy right is important. It enables people to orient their engagement in the economy. When, as individuals, we buy things, invest our money, or barter and trade, or when as a community—local, national, or international—we adopt the rules and policies that govern the economy, that’s the time to ask ourselves whether we are helping to achieve the economy’s purpose, and, especially, what that purpose is.

At first blush, in light of conventional wisdom, the economy’s purpose may seem to be obvious: to provide ever-increasing wealth through unlimited economic growth. If we work toward this purpose, we are told, then society, community, and the environment will all be well-served. Borrowing from the future and creating huge debt loads to ensure economic growth is no problem, because growth will ensure the ability to repay the debt—whether in rich countries like the United States or developing countries selling off their resources in return for international loans. According to this mainstream economic analysis, community issues like health and education, as well as care of the environment, can only be addressed by wealthy societies; so the first priority is always to concentrate on that economic growth. This is an answer grounded in wrong relationship.

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Right relationship leads to a very different answer to the question “what is the purpose of the economy?” Isn’t it reasonable to think that the purpose would focus on the well-being of communities and the individuals who make them up? In a whole earth economy, the purpose of the economy is to preserve and enhance the integrity, resilience, and beauty of the whole commonwealth of life. A whole earth economy is not necessarily a no-growth economy. It is an economy with other priorities: providing rich and fulfilling lives for both individuals and communities, but without pushing toward extreme wealth and advantages that destroy social and ecological well-being. The Woodstock Farm Market, as well as the many markets and community cooperatives like it, has the flavor of right relationship.

Where Did “The Economy” Come From?

To see why the economy needs to orient toward a new purpose, it helps to remember where the concept “the economy” came from.² The economy, as it is now understood, began relatively recently. Before the eighteenth century, farmers, tradesmen, craftsmen, and other businesspeople sold, traded, and bartered their goods and services within well-defined social contexts. Economic activity took place within the social order and as part of social life. That economy was closely tied to the fluctuations of the local environment and climate. The Woodstock Farm Market would have felt right at home in the eighteenth century.

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During the course of that century, the economy broke away more and more from its ties to communities, the local environment, and the social order. Land ownership became a more powerful basis for asserting economic might, industry and manufacturing began to take off as a result of technical innovation, a larger and increasingly wealthy elite started accumulating enormous financial power, and long-distance trade expanded significantly. Although banks have existed for thousands of years, the era of modern banking began only in the late eighteenth century. Money and all its baggage— borrowing, interest, credit, speculation—took on a more central role in providing the means of life. More and more, society and the environment became subservient to wealth accumulation and expansion of the economy.

Out of this transformation arose the idea of the self-regulating market. Such a market is assumed to take care of the negative side effects of the economy and to work for the common good all by itself. Belief in a self-regulating economy became a significant factor in the disruption and reconfiguration of social and ecological relationships during the Industrial Revolution. The market economy that began its modern expansion in the nineteenth century undercut relationships and concerns that did not feed into its growth and financial power. The increasingly influential brokers of the market economy lobbied government officials with the message that the market was the true and best engine of progress, and that it was therefore fitting for the market to have power and control over the entire range of social and ecological relationships. As the market economy arose, the artificial entity called the corporation arose, as well, and over time the corporate duty to maximize shareholder profits increasingly has overridden the accountability of corporations to society.

By the end of the nineteenth century, belief in the moral supremacy of the market reached a peak, especially in North America. Social Darwinism was the prevailing philosophy: The people with the most money and power were seen to reflect a perfectly normal and acceptable form of “survival of the fittest.” This was the heyday of monopolies and union-busting, of the robber barons, John D. Rockefeller’s empire at Standard Oil, and the like—what is called “laissez-faire capitalism,” with all its excesses and social upheavals that led to the founding of labor unions and the strengthening of Socialist movements.

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At various times and places, societies rebelling against laissez-faire capitalism have demanded regulation to protect people, communities, social institutions, and the environment from the market’s harsh brutality. Labor laws that created minimum wages, restricted working hours, prohibited child labor, and protected the right to unionize stemmed the concentration of power and money of the robber barons of the early twentieth century in the United States. Antitrust laws did their part, too. Social security, socialized health care, and environmental protection laws also arose eventually to place limits on market forces. Almost miraculously, the wise decisions to create publicly managed national parks and forests and wildlife reserves arose in the United States around the same time that the great monopolies of the Gilded Age were peaking in the early 1900s. Yet, then and now, the push for an unregulated market has remained a strong current in the global economy, especially in the United States and other wealthy countries.

The notion that economic growth was a crucial social and political necessity gradually took hold, particularly in the period following World War II, and explicitly at the start of the Kennedy Administration in the United States in 1961.³ It has held on ever since. It rested in part on carefully worked out theories that Paul Samuelson synthesized in the 1950s and 1960s and that became the standard of the profession. All the predictions of standard economic theory rest on assumptions, and market failure is what happens when these assumptions turn out to be false—as they nearly always do.⁴ Correcting these failures provides a robust role of government. Too robust by far, it seems, for many who stand to gain from the market.⁵ Free-market ideology virtually ignores the well-grounded claim in standard theory that government intervention is needed to address market failures.

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Yet free-market ideology has regained dominance in the Western world since the early 1980s. Laissez-faire capitalism, or market fundamentalism, is the belief that there is no reasonable alternative to a virtually unregulated market for understanding economic relationships, engaging in productive economic pursuits, and, ultimately, promoting the common good. This, however, is not science, and is not even economics: It is analogous to a religious faith.⁶ According to this creed, governments should do nothing other than define property rights and enforce contracts.

The “laws of economics” on which market fundamentalism claims to be based have their origin in the particular set of property and social relationships that were current when Adam Smith and other moral philosophers were studying the economy systematically in the eighteenth century. Not only have market fundamentalists terrifically distorted Smith’s analysis of how to run a proper economy, but the “laws” he and other early theorists “discovered” were particular to the political economy of their time. They were not laws encoded in cosmic nature for all time and circumstances. This distinction is important. Understanding that the economy is dependent on circumstances and not governed by contrived “laws of nature” is a liberating insight. It makes people realize that they can choose alternatives, and it makes clear that our current circumstances require a different approach.

In seeking a whole earth economy, the choice is not between market fundamentalism and standard theory—for both are oriented to growth, irrespective of ecological impact, as a primary objective of economic policy.

A saving grace of the economics profession is that some frontline economists have understood this problem and are working out the terms of reference for a steady-state or negative-growth economy that may well be needed to provide for long-term ecological and social well-being.⁷ The first great step toward building a whole earth economy is to unlock the mental straitjacket that market fundamentalism and its public-policy advocates have decreed to be the only rational way to think about the purpose of the human economy. Within the larger scientific framework of a whole earth economy, many of the insights of standard theory, unlike those of market fundamentalism, find a congenial home.

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The Social Heritage of Providing for Human Needs and Desires

Understanding how goods and services were made available to people before the invention of the modern market economy is the easiest way to envision the potential for a whole earth economy. The starting point for building this vision is to acknowledge that the baseline purpose of the economy is to provide access to the means of life, which also means asking the question: What is life all about? Biologists tell us that human nature is built on basic desires to reproduce, to ensure basic security and comfort, to display possessions and wealth as a means of obtaining and keeping mates, and to cooperate and associate with like-minded people.⁸

Of course, there are many ways to express and satisfy those desires. Obviously, humans also engage in complex moral, aesthetic, and religious behaviors. The economy reflects the way that people individually and in community go about providing the means to these activities. What, then, distinguishes the community-oriented economy of the Woodstock Farm Market from the ruthless economy of the pyramid schemer, the oil speculator, or the junk-bond dealer?

The Woodstock Farm Market, like many traditional economies, provides access to the means of life within a context of ecological sensitivity and mutually supporting social behavior. Cooperation in mutually beneficial economic dealings is the ethical root of society. The key elements of this kind of cooperation are respect and reciprocity: respect for other people and for the environment, reciprocity in the form of the give-and-take that leads to mutual satisfaction in the form of fair treatment. From the earliest human societies of nomadic hunting and gathering groups, providing access to the means of life was framed by a code of reciprocity: If you share some of those roots you found, I will give you a cut of the antelope I just brought down. Inequities and conflict certainly occurred. But without an underlying sense of fairness, in which social relations were continually rebalanced, as they are in chimpanzee and many bird societies, our ancestors would not likely have proceeded very far on the great trek of human evolution.

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Once farming, the domestication of animals, and the cultivation of storable grains reached a level where some people started having surpluses, the stage was set for those holding the surpluses to claim superiority based on their greater ability to help others survive. Thus, political forms of domination, beginning with early chieftainships, have unfolded across subsequent human history. Wealth accumulation and control of access to the means of life have been the plot for this part of the human story—with claims of special access to the will of God and divine right also playing their role in the history of domination. The varied wielders of power in history have asserted their control, ruling over those with “less” in ways that were sometimes brutal, sometimes beneficent.

Through all those centuries of hierarchical domination, respect and reciprocity never disappeared. These values remain at the heart of all cultural and ethical traditions. They are so encoded in human experience that children get a sense of them at a quite early age. The Golden Rule, the magic of getting more when you share, the innocent rage at being treated unfairly: Children learn early what right treatment by and good relationship with others feels like. To be undercut, these basic values have to be intentionally crushed. And that is exactly what an economy does when it encourages the amassing of wealth and rewards greed, all in the name of more indiscriminate growth. Our present economy tempts us too often to satisfy our basic biological drives—reproducing, security and comfort, display of consumption, and taking sides—by trading in empathy, bonding, and social unity for winning at all costs and climbing the social ladder so as to lord it over others.

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The Fundamental Persistence of Respect and Reciprocity

History has stories in which the spirit of respect and reciprocity prevailed, and others telling how cheating, brutality, and violence reigned for long periods. Examples of both still exist today. Since 1972, for example, Bhutan has measured its social well-being in terms of Gross National Happiness—a sign of its decision to promote quality of life over getting rich and raising GDP. In Myanmar, by contrast, a brutal military dictatorship suppresses the people’s will and manages the country’s wealth for its own purposes. Despite this mixed record, respect and reciprocity have not only endured through history, they have also emerged as ideals to which all cultures of the world aspire—even if, in practice, they are often cast aside. Many international declarations are built on the principles of respect and reciprocity, such as the 1948 Universal Declaration on Human Rights. Likewise, the 1992 Rio Declaration affirms the international community’s commitment to sustainable development and to protecting the environment for future generations.

One reason that these principles have endured is that they have deep roots in history. During the time that the German philosopher Karl Jaspers and others identify as the Axial Age,⁹ a six-hundred-year period in the first millennium BCE, a series of great religious thinkers and philosophers in world history appeared. Each bore witness to a fulfilling, spiritual way of living that drew on a deep sense of right relationship. These figures include Confucius, Lao-tzu, Siddhartha Gautama (Buddha), Asoka, Isaiah, and Amos (along with other Hebrew prophets); and, later, Jesus and Muhammad. Their teachings and examples all point to a spiritual path to self-worth and meaning more profound and gratifying than the accumulation of wealth, power, and empire that marks so much of human history.

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The great thinkers of the Axial Age laid down universal foundations of right relationship that have lived on through the ages. Their messages of compassion, mutual aid, community service, human well-being, and respect for life provide the basis for people of all cultural and religious traditions to lead a life respectful of the integrity, resilience, and beauty of the entire commonwealth of life. Some have referred to the Reformation as a second Axial Age, and to our current ecological crises as the opening to another pivotal era of spiritual renewal.¹⁰ Whether it is called a new beginning or a time of regrounding in long-recognized principles, the time is right for a pivot toward an economy in right relationship with the commonwealth of life.

The Wisdom and Witness of Indigenous Cultures

Another context of cultural experience must be added to this picture. Indigenous peoples have often remained within the circle of a particular wisdom about human relations and the human– earth relationship, if only because they live in such intimacy with the realities of life and survival on this planet. A heritage of social experience based on respect and reciprocity can be found if one looks for common beliefs within the remaining teachings of the elders of many North American indigenous communities.¹¹ Still today, many traditional peoples aspire to fairly common ideals and values and follow an ageless code for living in harmony with all the other beings and structures of the earth. This discussion draws primarily on North American indigenous cultures, but is generally congruent with the cultural ways of indigenous peoples in many other regions of the world.

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Perhaps no other characteristic illustrates so clearly the common ethical beliefs of indigenous social life as the attitude toward children. Some years ago Jean Briggs, an ethnographer, conducted a study of Inuit child-rearing practices and titled her book Never in Anger.¹² One surprising discovery for her, coming from the mainstream nonindigenous culture, was that not only was it completely unthinkable for an adult to strike a child, it was also a rule of relationship never to correct or deal with a child in any way from the unworthy footing of anger. This is not to say anger may not arise, but the disrespect and inequity of thrusting it on a child is considered unacceptable.

This bears witness to one of the key elements of traditional ethical systems passed down through generations—respect. Respect for children, for family, for oneself, and all others; respect for the ancient lineage of grandmothers and grandfathers; respect for all living beings, for the land as a living being, for all the gifts of the land and all the beauty of the earth; respect and continuous gratitude to all spirits, to all the elements of the earth and sky, and to the web of life. Without this circle of respect and gratitude filling the heart and mind, a person stumbles through life from one catastrophe of wrong relationship to another.

This is how the behavior of many Europeans appeared to indigenous peoples in North America. Most Europeans, to the native groups they encountered, seemed bereft of the awareness and intelligence of fully formed humans. Hence, for example, the bewildered horror of the Cree of Northern Quebec to the practices of southern hunters even today, who take a haunch or a trophy head from a caribou but leave the rest of the animal to rot. The lack of respect this shows, both to the animal that had given up its life and to the land that provided it, so shocked the young Cree of Chisasibi that they filmed hours of video to expose this crime through the media— never realizing that to the mainstream media, wasting an animal in this way is not a moral issue.¹³ Still today, indigenous peoples must continually push to have their traditional knowledge of how the earth works recognized in the policy arenas where many decisions that affect them are made.

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When indigenous peoples of North America began to understand that their use of the land was being stolen permanently, they realized that respect as they knew it played no part in most Europeans’ intentions for the future, or in their view of relationships. When they witnessed the slaughter of the buffalo, and that great tide of life on which they depended vanished from the plains, their world was unhinged by such monstrous disrespect and deliberate, wasteful destruction.¹⁴ When they witnessed the tall-grass prairie cut into ribbons and literally overturned by the steel plow, they saw a disrespect for the earth that filled them with despair. In those days, the enterprising farmers thinking only about feeding the growth of the capital-driven grain markets back east, like Quebec’s hunters today, would have seen this reaction as benighted.

It is now known that in causing vast loss of topsoil, the “plow that broke the plains”¹⁵ was an engine of enormous ecological destruction. Thousands of tons of soil and fertilizer wash into the Gulf of Mexico each year because farmers have wrong relationships with the land of the Plains. The result is a growing dead zone in the Gulf and degraded soil on the Plains that requires even greater use of industrial fertilizers to keep it productive. The mind of respect and the dream of cultural longevity that stands behind ecologically coherent adaptation plays no part in this game of maximizing short-term profit and ignoring long-term loss. Among the many contributions indigenous cultures have made to the human prospect, respect is now being recognized for its survival value in social and economic adaptation. Respect is increasingly in the minds and hearts and on the agenda of all those who are seeking a hopeful way into the future.

An ethic of respect, given at every turn and expected in return, creates the emotional wellspring that is critical for communities living in right relationship with the commonwealth of life. Respect at this level was critical for eons of successful adaptation for our species. It is no less critical for the social and ecological survival of communities, nations, and all peoples in the present. The place of respect in right relationship with life and the world is one of the key moral lessons that indigenous peoples contribute to understanding a whole earth economy.

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The Vision of a Whole Earth Economy

A whole earth economy takes no more than it needs and uses no more than it must. Building a whole earth economy means moving from endless production and concentration of wealth to providing only as much wealth as is needed for dignified, secure living. It means moving from the burnout of unlimited growth to the resilience of continuously renewed abundance. A whole earth economy is keyed to the resources of local and regional ecosystems, and to the shared abundance of the earth’s ecosystems as a whole. This vision of a whole earth economy does not see a dangerous or restrictive depression of economic activity, but, on the contrary, an intensification and a flourishing of all the productive, provisioning, service, and trading activities that create and support the integrity, resilience, and beauty of life’s commonwealth. This, surely, is the purpose of the economy.