The Economics of Civil Society
Human institutions to benefit each other and future generations.
by David McCarthy
by David McCarthy
Yet there is a bright spot to be seen, and I call it civil economics. To
see what is meant by this, we need to take a step back and look at the types of
institutions we create in human society. They can be categorized in three very
broad groups: governmental, business, and civil society. These institutions
overlap and interact with each other in complex ways, but the distinguishing
factors between them are quite clear. Civil society organizations cover a very
wide range, but all are based on some sort of idea, interest, or inspiration,
rather than on political power (government), or on the activities of livelihood
(business).
The subject of civil society involvement in the economy is really a huge
one, when you consider that it includes spiritual, educational, and charitable
and philanthropic groups of all kinds. At their best, these groups represent
the humane response to all the challenging circumstances that arise in the
human realm. They also represent the nurturing of human potential, such as in
education and the arts. Larger civil society organizations can have huge
impacts on an economy. (Think about a college town like New Paltz.) On the
ground, civil society organizations range from huge religious institutions to
massive service groups like the Red Cross, to the global network of tens of
thousands of grassroots environmental organizations, and on to the purely
whimsical. (When I lived in Ann Arbor in the ‘70s, there was a group called the
Society for Creative Anachronism, which was a bunch of guys who dressed up in
medieval armor and went outside and whacked each other with wooden swords.)
For this article, we’ll focus on one particular area: how civil society
can contribute to changes in the structure and functioning of our global
economy. In most general terms, civil society has the potential to “triangulate”
the deeply unhealthy relationship between business entities and governments,
and to transcend national and social divisions as well. How will this
triangulation happen? The first way is through the ongoing cultural
conversation. Civil society is already deeply involved in this conversation,
though the many think tanks and policy institutes are a decidedly mixed bag.
Often the economic commentators you see on TV are just paid shills from
corporate-funded think tanks. And don’t get me started about the phony
nonprofits with names like “Americans for XYZ” that are actually funded
entirely by corporations wanting to shove XYZ down our throats. Nevertheless,
this function of contributing to public debate on issues is an important form
of triangulation that is well established.
However, civil society organizations are seeing the need to move toward
various kinds of direct economic activism to really have impact. Indeed, they
are already doing so in important ways. The New Economics Institute not only
sponsors the yearly E.F Schumacher lectures, it has been involved with the creation
of land trusts in nearby Western Massachusetts. The nonprofit is also the
organizational sponsor for the successful local currency there, Berkshares.
Practically speaking, there are some things we really have to get clear
in order to see the potential of civil society economic activism. First, we
need to get disentangled from thinking of economic issues purely in terms of
different types of relations between existing government and business power
blocs. It may seem very smart and pragmatic to just say, “the government should
do such and such,” or “the corporations should do/not do such and such.” But it’s an endless debate, and one that is more stalemated than
ever. The fact is that determined individuals and groups can make a difference
by taking initiative in completely creative directions. This is essentially
what is happening with things like land trusts and local currencies.
Second, we need to think about, and try to develop, the kinds of
personal qualities that will help us work effectively in a nonprofit context,
such that we can personally make a difference through working with others
around common goals.
In practice, and not surprisingly, all this work starts locally. There
is a great deal of civil society activism these days around local currencies
and exchange systems. It is important to recognize how powerful the issuance of
money actually is. And credit exchanges, which transcend money altogether, take
it to another level.
For all the power of local currencies and credit systems, there is
another dimension of even greater power: the power of asset formation and
investment. There is no reason that civil society groups could not create asset
pools dedicated and invested for the wellbeing of every human being on this
Earth—and of every human being yet to be born. There is also no reason that,
every time a baby is born, we couldn’t create a personal asset account for that
child, again to be invested in ways that enhance human society and the human
future. I call this body of thinking “civil endowment theory.” The legal
structures for such a system already exist in the form of nonprofit trusts and
endowments, and the seeds of this form of investing are already present in
movements such as Socially Responsible Investing, Impact Investing, and more
recently, Slow Money. I am convinced that establishing such endowments would be
of great benefit to humanity, and I am dedicated to bringing this inspiration
into reality as my personal practice of civil economic activism.
At a more general level, a civil society approach to economic reform
carries great potential in so many ways. I would urge anyone with positive
intentions in this area actively investigate, and get involved with some of the
wonderful initiatives that are out there—or start your own!
Resources:
The New Economics Institute neweconomicsinstitute.org
New Economics Foundation neweconomics.org
For more on civil endowment theory see the Trickle-in Economics Blog at http://trickle-in.blogspot.com
or email tongdrol@gmail.com.
Posted by Chris Hewitt
on 11:15 AM.
Filed under
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New Economics
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